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Review of Literature

This chapter shows what other scholars have written about dairy industry. Attempts
have been made to review briefly the specific and relevant literature, which has direct or
indirect bearing on the objectives of the present study. Accordingly, relevant literature
has been reviewed and presented as follows.

2.1 Strengthening the Operational Efficiency of Dairy Supply Chain in


M Subhuraj, T Ramesh Babu, B Suresh Subramonian (2015). Dairy is an important

part of the rural economy of India. Large number of cows and buffaloes are being
reared in rural India. Similar is the situation of rural economy in Tamil Nadu. Farmers
who rear the milching animals may fall in various categories like small, marginal and the
down trodden farmers. However, these farmers actually produce majority of milk being
produced in Tamil Nadu.

In this paper an endeavour has been made by the authors to find out various ways and
means to improve the operational efficiency of complete milk chain, starting from
production of milk by farmers, collection of milk, sending the milk to dairy plant,
processing of milk, packaging of milk and then marketing the same upto the consumers
at various locations in villages, middle towns and big cities.

The authors have collected the data through literature review, questionnaire, video
recording, field study and various researches. A comparison has been made between
Tamil Nadu Cooperative Milk Producers Federation (TNCMPF) and Gujrat Cooperative
Milk Producers Federation (GCMPF) (AMUL). Tamil Nadu has been divided into seven
agro-climatic zones. Out of these seven zones, two zones fall under high rainfall zone
and hill zone. Hence these two zones have been excluded from the study. Thus, for
the purpose of research and data collection only five agro-climatic zones have been
considered. Each zone was represented by one district.

Main observations of this research are paucity of minimum level of land, working labour,
availability of water and day today working capital. Other challenges being faced by the
dairy industry is animal health. Due to lack of proper health, there is low productivity
from the milching animals. There are also the challenges of paucity of well balanced
feed for cattle. Large number of ill organised sectors/ vendors are also the challenges
in this sector. Paucity of water availability is also on increase due to urbanization, low
rainfall, falling ground water level and other environmental pollution issues. Due to
urbanization, the grazing land is decreasing, available agricultural land are deteriorating.
These challenges are the major impediments due to which the operational efficiency is
not improving.

The research paper also discusses the ways to fix the procurement price of milk based
on the input cost, which includes cattle cost, rearing cost, feed expenditure, expenditure
on labour, land, electricity and water expenditure costs.

In the end, the research paper discusses the various recommendations which include
firstly, the creation of various dairy zones, secondly, implementation of dynamic milk
procurement methods, thirdly, cooperative society strengthening, fourthly, improving the
feed availability by enhancement of feed productivity, fifthly, planning for animal health
and integration with Information Technology (IT)

2.2 Emerging Trends in Business Strategy. A success story of Mother Dairy.

Rajeev Ranjan, Rahul Bangabash (2015). Initially the milk production of India was
very less, however, with the passage of time India has emerged as one of the largest
producer of milk. It has given opportunity to entrepreneurs to take advantage of this
situation in India. Indias milk production is consumed in the urban areas. An estimated
50 percent of milk produced is consumed by 25 percent of population of India living in
the urban areas.
Mother Dairy was established in 1974 as part of Operation Flood. Now it is a part of
National Dairy Development Board (NDDB). Mother Dairy gets its milk from the dairy
cooperatives. In addition to milk, the company also handles fruits, vegetables and oil
seeds. Today, Mother Dairy is the largest milk company not only in India but whole of
Asia. It handles about 40 % of the milk market in the organized milk sector in Delhi and
its surrounding areas. Mother Dairy has now started supplying milk to other states
including Haryana, Maharashtra, Uttar Pradesh, Gujrat and Andhra Pradesh. Today, it
is very convenient for the consumers to pick up their requirements of milk, Dahi,
Cheese, Lassi, Chach, flavoured milk and various types of Ice Creams.

Initially, Mother Dairy declared its two business philosophy. Firstly, to receive correct
market price by offering quality milk and milk products to consumers. Secondly, to
uphold the institutional structures which empowers the milk producers and farmers.
Various strategies implemented by Mother Dairy are namely Focused Approach, Wider
Spread, Product Differentiation, Smart Marketing. Under focused approach, Mother
Dairy is interested in catching the bigger markets all over India. Their aim is to go to
new locations like Hyderabad and Bangalore in South. Under wider spread strategy,
Mother Dairy has spread its network of milk to Jaipur, Kolkata, Haryana and Mumbai.
Mother Dairys non-dairy product like edible-oil brand called Dhara is present in whole
of India. Under Product Differentiation, Mother Dairy is in favour of all Indian Flavours
and this formula has actually worked in its favour. Under Smart Marketing, Mother
Dairy is making all efforts to take its various product to a higher platforms.

Various perspective strategies taken by Mother Dairy for future includes strengthening
Cooperative Business, Assuring Quality, Increase the production and research.
Strengthening Cooperative Business includes recruiting, training and motivating more
number of women to work for Mother Dairy. It includes persuading the Central and
State Government to free the Dairy industry from Cooperative laws. Increasing the
production includes improving the capability of local breeds, use of high quality feed for
cattle, increasing the availability of green fodder. Strategy for Assuring Quality includes
addressing any quality problem issues at all stages from the production level to
consumer level. Research includes linking large cooperatives and ensuring availability
of analysed information for decision making.

In addition to above, Mother Dairy has taken various moves for diversification in other
fields like edible oils, fresh fruits and vegetable under the brand name of Safal.

2.3 Marketing Efficiency of Dairy Products.

N Rangasamy, JP Dhaka (2008). Marketing efficiency of dairy products mainly

depends upon the efficient procurement of milk, correct processing of milk at milk plant
and thereafter proper distribution of milk and milk products upto consumers. An
endeavour has been made by the authors to compare the efficiency of co-operative and
private dairy plants. To compare the marketing data and other details of cooperative
and private sectors, one milk plant from each cooperative and private milk plants were
selected in Coimbatore district located in Tamil Nadu State.

Cost methodology consisted of Marketing Cost, Marketing Margin and Marketing

Efficiency. Marketing cost mainly depends upon procurement cost of milk, processing
cost incurred at milk plant and thereafter distribution cost of milk and milk products upto
customers. Processing Cost comprises of expenditure incurred by dairy plant on
electricity, refrigeration, maintenance and repairs of all machinery, cost of labour,
expenditure on stationery, various types of stores, packing material expenditure,
expenditure done on salary of staff, expenditure done on quality control, interest being
paid on the borrowed money. Distribution cost encompasses all the expenditures
incurred on transportation of milk and milk products, advertisement expenditures,
expenditure done on rent of booths and various outlets, expenditure done on the salary
of personnel involved in marketing, expenditure done on refrigerated condition where
milk and milk products are kept during sale, interest and depreciation of all buildings
and machinery.

Marketing Margin of dairy products is taken as the difference between the selling price
and total cost of procurement, processing and distribution. Marketing Efficiency in the
research has been considered as the relation of value addition to the marketing cost of
milk and milk products. In the present study value addition is equal to difference
between selling price of milk and milk products and the raw material cost.

Thereafter, marketing cost, marketing margin and marketing efficiency of cooperative

societies and private dairy companies for milk and milk products have been compiled,
analysed and discussed. Having seen and studied all the data available it is concluded
that marketing cost of tonned milk is same both in cooperative dairy plant and private
dairy plant. In the case of butter and ghee, the marketing cost has been found to be
less in the cooperative dairy plants when compared to private dairy plants. In certain
products like standardized milk, flavoured milk and full cream milk the marketing cost is
higher in the cooperative dairy plants than the private dairy plants. Marketing margins
of private dairy plants is higher than cooperative dairy plants when all milk and milk
products are considered except toned milk. Marketing Efficiency of cooperative dairy
plants have been found to be lower than the private dairy plants for all milk and milk
products except toned milk.

2.4 Increasing Operational Efficiency through Improved Customer Service.

Jaana Auramo, Kari Tanskanen and Johanna Smaros (2010) All logistic system
aims to satisfy all the needs of customers at the right time, with a correct quality of
product or services at a competitive price. Today most of the product suppliers are
offering additional services related to a particular product or services. If we look from
the point of view of a customer, this is a different approach to outsourcing, which
amounts to not only buying a particular product or services but it amounts to buying an
integrated and value added product or services. By doing this the supplier becomes an
equal partner with the customer. This helps in achieving better operational efficiency
due to good relationship and reliable information flow between customers and suppliers.

In this particular study, it talks about a company which is a supplier in the field of
process maintenance business. The company is moving from the traditional way of
doing business to building long term relationship with the customers. Initially, the
company was selling equipment, various spare parts, repair services etc. But, now the
company is offering complete inventory management of spare parts, various types of
preventive maintenance.

The main concept in the demand and supply chain is the concept of Value Offering
Point (VOP). Demand chain mainly consists of planning, Inventory Management
purchasing at Order Penetration Point. Whereas, the supply chain consists of
Manufacturing, warehousing, distribution followed by Value Offering Point (VOP).

Initially when the cooperative service agreement was not in place, the customers
ordered both the things, the spare parts and various types of maintenance related
services. Those were demanded from the suppliers. However, with the passage of
time there is a situation where the customer and suppliers have agreed to a cooperative
service agreement. The supplier has also in addition to the product has offered the
inventory management services and after sales services to the customers.

With the coming of cooperative service agreement, the role of supplier towards the
customers have changed. This has brought about a tremendous amount of confidence
to the customers. This has brought about improvement in the operational efficiency of
the company. However, the supplier need to have more precise information and
increased planning independence while planning its processes.

2.5 Integrating Information Technology and Operational Research.

Martin Butler, Pat Herlihy, Peter B Keenan (2010). Transportation costs are generally
one of the important part of cost component in perishable items. The transportation
factor becomes more prominent in agricultural products and more so when the dairy
products are being transported. The cost of milk mainly comprises of expenditure on
transport and cost of raw milk being supplied by the farmers. Thus an efficient and
effective transport system can allow a better milk price for the farmers. It is due to the
reason that most of the dairy companies have taken all the initiative to reduce the cost
of transportation. This has been done mainly by way of utilizing the larger carrying
capacity vehicles. Drivers of these vehicles also have long working hours due to cost
cutting Milk dairies are always interested in scheduling the transport route in such a
manner that maximum farmers are able to utilize the services.
Thereafter, came the subject of Operational Research (OR) in the field of Milk
collection. Computer technology came to the rescue at this stage. To resolve the
problem, Operational Research (OR) techniques were included into a number of
computer packages. The technique brought down the distances to a large extent. In
the beginning these softwares were also applied to resolve the transport problems
which were concerning the marketing and distribution of various dairy products upto the
customers. This research paper goes on to discuss Geographic Information System
(GIS) and Decision Support System (DSS). Fisher was an important researcher in the
field of vehicle routing. He gave the suggestion that a large number of ways and means
are there to improve algorithm robustness. These better ways included using the better
road related network data, which has been possible only after the introduction of GIS.

Milk sector problems are totally different than other commodity routing problems, which
varies very less on daily basis. The various lessons drawn from the study suggestes
the requirement of technology which can support the scheduler rather than any
technology which may attempt to replace scheduler.

Thereafter, the author goes on to discuss the DSS approach to scheduling, Decision
Support System (DSS), Early DSS and Second Generation DSS. Thereafter one case
study of DSS success has been discussed.

Thereafter, there were certain issues which were to be resolved between management
and workers. Firstly, it included the optimal size of a cluster. Secondly, it included the
allocation of farms to a cluster. Thirdly, it included the ownership of the collecting
companies. Fourthly, it included the price per litre to collect the milk.

2.6 Economics of Milk Processing in Dairy Plant in Haryana.

AK Chauhan, KK Kalra, Raj Vir Singh and BB Raina (2006) A study has been
undertaken by the authors in respect of different dairy products like skimmed milk,
standerdized milk, double-toned milk, full-cream milk, toned milk, ghee and ice-cream.
The study was conducted in a dairy plant in Haryana. The study revealed that
production of double-toned milk has revealed loss to the dairy plant. The most
profitable venture has been in the production of ice-cream. Other products also has
generated profit for the dairy plant.

In the beginning of the study the authors have discussed about milk production, which is
increasing at the rate of one percent in the world wide whereas, the same is increasing
at the rate of 4.5 percent in India. This rapid growth has attracted large number of
entrepreneurs in this field. In addition to milk production, India is also giving one of the
largest market for dairy products to the milk producers. The research says that 30
percent of the total milk produced in India is being consumed by 10 percent of Indian
population, who are rich. Only 10 percent of milk produced in India is consumed by 30
percent of population who fall in the lowest income group.

Huge amount of investment is required while establishing a dairy plant. The volume of
milk produced in these dairy plants are less and the cost of production of milk is also
high. Due to this reason the benefit to the producer and consumers are less. For the
study and research purpose, the authors selected a dairy plant which is having a
capacity to produce 60,000 liters per day situated in the north eastern region of
Haryana. The data was, collected from the plant. In addition to collection of data,
interview was also conducted mainly of those personnel who are working in the dairy

In order to study the economics in manufacturing of various products the dairy plant was
divided into two departments. These were main and auxiliary departments. The main
department was directly involved in production of dairy products. The auxiliary
department provided the other services like quality control, refrigeration etc. Cost of
services provided were given to the main department for calculation of the overall cost
of dairy products.

Thereafter, break-even output, steam requirement, electricity consumption, refrigeration

requirement were calculated. Thereafter cost of all the dairy products were ascertained.
The research reveled that all dairy products were produced by the diary plant at a
quantity which was higher than the break-even quantity except the double-toned milk.
The production of double toned milk was incurring a loss of Rs 6.16 per litre. The
production of ice-cream was most profitable at the diary plant. Therefore, the authors
recommended to raise the production level of double-toned milk upto the level of break-
even quantity and observe the results from economy point of view. If the production of
double toned milk still suffers the loss, then the production of this item is recommended
to be shifted to other dairy where profit is being generated in double-toned milk

2.7 Amul Cooperative in India in relation to Organizational Design and

Operational Efficiency.

Dr Ruchira Prasad and Dr Rupali Satsangi (2013) Present research paper

discusses the relationship between designs of an organization and their operational
efficiency indicators. The study has been carried out keeping the Amul Cooperative into
context. The structure of Amul is similar to the structure which is available in the federal
form where each unit works independently of other units.

The objective of this research paper is to find out the significance of Amul cooperative.
Thereafter to examine the relationship between Organization design and operational
efficiency and finally to recommend certain steps for smooth functioning.

Data for the research was collected from primary source and secondary source.
Primary data basically was collected through open-ended and closed questionnaire.
Interview was also conducted of various AMUL officials of various levels, farmers and
customers. Thereafter, secondary data was obtained from various journals,
publications, annual reports, newspapers, internet and magazines.

Orgainisational design is basically a formal structure of integrating the people who are
involved in the functioning of that organization. It brings out various roles, working and
reporting relationship among people working for that organisation.

The research paper discusses the Amul Model. It is made up of three tiers of
cooperative society. The first one is the village society which is also the procurement
unit. The second one is the union itself which is also the processing unit. The third tier
is the federation, which is mainly the marketing unit. All these institutions are
independent of each other.

The Amul Model dairy plant is headed by the Managing Director, who is appointed by
the board of directors. The board of directors are mainly the farmers who are the part of
the societies. Thus at each level of decision making, there are farmers/ producers. It
gives them the feeling of ownership, hence all the decisions taken by them are in the
best interest of the cooperative society.

Whereas, if AMUL Model is compared to other cooperative societies, other cooperatives

are headed by the Managing Director who is generally an IAS officer on deputation.
Since, he is not permanently with one federation/ cooperative there is no sense of
belonging for him. The elections of society, union and federations are not politicized in
case of AMUL, whereas in other dairy cooperatives and federations, there is influence
of political parties during the election process. At AMUL the employees are selected
through a proper process by the Human Resources department of the Cooperative. On
the other hand recruitment process in other milk cooperatives are dependent upon the
policy of state govt. Thereafter, the authors in the research paper talks of operational
Efficiency. Operational Efficiency depends upon the operations strategy of the firm.
Under operational efficiency various factors like dynamic logistics system at AMUL,
Quality Management, E-revolution, Brand-a power have been discussed in detail.

Having studied and analysed all the data, feedback and in-depth study of operations
and discussion with vendors, officers of AMUL and farmers, certain action plan were
suggested by the authors.

The first action plan is the dissemination of Mission statement to all the members and
employees. The second action plan is the enlargement of membership. Participative
Management is the third action plan which has been suggested by the authors. The
fourth action plan is to change the cooperative law with an aim to depoliticize the
cooperative act. Other action plans include avoiding delay in Decision Making,
availability of products, awareness in unexplored areas, Coping with the completion,
product development, Availability of power, Attrition Rate, Supply Chain Management,
Application of Six sigma and Improving Human Resources.

Looking at the progress done by AMUL, the similar type of model can be put in place at
other dairy cooperatives to bring overall operational efficient dairy unit which can be a
perfect blend of policy makers, management, farmers, employees, professionals and IT

2.8 Marketing effectiveness of channels of Distribution on Dairy Industry.

S Ayyappa, Naik Nenavath (2013). India is a country where three fourth of the
population is staying in the villages. In the villages the farmers rear animals namely
cows, buffaloes, camels, goats etc to earn their livelihood and increase their income.
Govt of India realized that promotion of dairy is likely to give boost to the upliftment of
rural population. Dairy Industry is also likely to bring social justice in the rural India.

An important feature of Indian dairy Industry is that most of the milk is produced in
village, but the milk consumption is maximum in the urban areas. Thus, there is a
requirement of an intermediary in between producer and consumer of milk. With that
aim in mind, large number of co-operatives have been established with an aim to
provide proper market to the farmers for their milk and also make sure that correct
quality of milk at appropriate cost is available to the consumers.

However, the channel of distribution which has been adopted by the various dairies
need to be examined and analysed so that remedial action is taken from time to time so
that satisfaction level of customers are maintained . The authors have planned to
collect the primary information and sample respondents from Guntur district of Andhra
Pradesh. Stratified random sampling has been adopted by the authors. Two
municipalities of Guntur district has been considered, these are namely Guntur and
Ponnuru municipality. The present study covers 160 respondents, 80 respondents from
Guntur and 80 respondents from Ponnuru municipality.

Authors have taken the response from the respondents under the various heads of
channel of distribution of milk and milk products. The first head is regarding choice of
distributor. The responses revealed that 44 out of 80 respondents from Ponnuru
municipality and 43 out of 80 respondents from Guntur municipality purchase their milk
and milk products from Sangam dairy. Thus 55 pent from Ponnuru town and 53.75
percent from Guntur town prefer to get the product from Sangam dairy.

Choice of length of relationship with distributor revealed that 48 out of 80 respondents

from Ponnuru municipality and 46 out of 80 respondents from Guntur municipality have
six months relationship with distributor.

When the factor of Time of Supply of products was considered by the authors, 48 out
of 80 respondents from Ponnuru town and 55 out of 80 respondents from Guntur town
revealed that they get the delivery of milk and milk products from the distributor in time.
Thus, above analysis reflects that most of the customers are generally satisfied with the
distributor as far as time of supply of products is concerned.

When the factor of Kind of relationship with distributor was studied by the authors, it
came to the light that 53 out of 80 respondents of Ponnuru town and 59 out of 80
respondents of Guntur town revealed that their relationship with distributor was Good.
Thus, above analysis reflects that most of the customers are generally satisfied with the
distributor as far as kind of relationship with distributor is concerned.

When the factor of Free schemes offered was analysed based on the data collected, it
came to the light that 59 out of 80 which amounts to 70 percent from Guntur town and
62 out of 80 amounting to 77.5 percent from Ponnuru town stated that they are getting
the Free Schemes offered by Sangam Dairy.

Factor of distribution of stocks has been also analysed by the author. It came to the
light that 44 out of 80 respondents which accounts for 55 percent of Guntur town and 37
out of 80 respondents which accounts for 46.25 percent of Ponnuru town came out with
the observation/ reply that they have distribution of stocks on daily basis.

Timeliness of delivery has been also analysed by the authors. 40 out of 80, which
amounts to 50 percent from Guntur town and 41 out of 80, which amounts to 51.25
percent from Ponnuru town came out that the timeliness of delivery of milk and milk
products is average.

Pattern of attendance to problem has been analysed by the authors in this research
paper. It has been observed that 49 out of 80 amounting to 61.25 percent from
Ponnuru Town and 42 out of 80 amounting to 52.50 percent from Guntur Town agreed
to the fact that distributor attends to their problems immediately.

Certain suggestions have been made by the author in the end of the research paper. It
includes keeping the outlets open for longer time by the Sangam Dairy. Opening of
additional grievances cells was another suggestion. To maintain better relationship
between distributors and customers certain orientation programme need to be
undertaken for the distributors.

2.9 Financial Health of Dairy Industry in Andhra Pradesh.

T Hima Bindu, Dr S E V Subrahmnyam (2012). This research paper deals with

various research tools to calculate the financial health of Dairy Industry of Andhra
Pradesh. In the beginning of the study, the authors have discussed the importance of
Indian dairy industry in the overall Indian Economy. The dairy industry has also shown
significant development in the past few decades. The scope of development is also
immence. Due to progress in the dairy industry, India today has become one of the
largest producer of milk.

Operational efficiency of dairy industry is improving due to various steps taken to reduce
the input cost of production. Steps have also been taken to increase the output in the
dairy industry. Various financial management techniques would further help in
increasing the productivity and profitability of the industry. Aim of this study is to study
the financial health of dairy industry of Andhra Pradesh using Z score analysis. The
study has been done for five dairy industries which includes National Dairy
Development Board, Amrit Corporation Limited, Heritage Foods India Limited, Gskch
Limited and Ravileela Dairy Products. This study covers the period from 2000-2001 to
Z score analysis was established by the individual named Edward Altman. This
analysis gives the general financial condition of an industry over a period of time.
Individual accounting ratios have been used to forecast the financial condition of an
Industry. Single ratio actually does not covey much of the meaning. There is no
standard financial ratio which has been accepted all over the world to predict the
financial health. Altman combined five individual accounting ratios. Thereafter, these
different ratios were converted into a single Z score analysis. A particular formula is
used to evaluate the Z score analysis.
Z = 00.12X1 + 00.14X2 + 00.33X3 + 00.006X4 + 00.999X5.

Five single accounting ratios which are used are; firstly X1 which shows the ratio of
Working Capital and Total Assets, secondly X2 which shows the ratio of Net Operating
Profit to Net Sales, thirdly X3 which shows the ratio of Earnings including Interest and
Taxes to Total Assets, fourthly X4 which shows the ratio of Market Value of Equity to
Book Value of Debt, fifthly X5 which shows the ratio of Sales to Total Assets. Z score
analysis have shown an accuracy of more than 70 percent.

This method was applied on five dairies of Andhra Pradesh based on the guidelines;
firstly if the Z score is below 1.8, then the industry is generally in the bankruptcy zone,
secondly, if the Z score is between 1.8 and 3, then the industrys financial health is
generally healthy and thirdly, if the Z score is above 3, then the industrys financial
health is too healthy.

Based on the Z score analysis the financial health of five dairies of Andhra Pradesh
were calculated by the authors. It came to the light that four dairies out of five fall under
too healthy financial zone. These four dairies are National Dairy Development Board,
Amrit Corporation Limited, Heritage Foods India Limited and Gskch Limited. One dairy
named Ravileela Dairy Products Limited has shown that its financial health is in
bankruptcy zone.

The financial health of Ravileela Dairy was analysed further and it came to the light that
financial health is poor due to following reasons; firstly, due to excess working capital,
secondly, due to operating profit in negative, thirdly, this dairy failed to achieve its sales
targets fixed by them, and lastly due to excess debt which resulted in interest burden.

2.10 Measurement of Scale Efficiency in Dairy Farms.

Barram Aldeseit (2013). The aim of this study is to find out the performance of various
dairies of Jordan which are considered for sampling. Jordan is basically a developing
country where dairy industry is considered an important part of the livestock sector.
There are approximately 628 dairy farms in Jordan having a capacity of 67,590 animals.
Family operates these dairy farms. Average number of animals per dairy farms in 508.
The dairy farm contributes more than half of the live production sector of the country.

In most of the developing countries, it is important to estimate or measure the efficiency

of agricultural sector industries. This study is aimed at using the input oriented Data
Envelopment Analysis (DEA) model under Constant Return to Scale (CRS) and
Variable Return to Scale to measure the efficiency of dairy farms of Jordan.

Sample size was taken as 20% of the population which was taken as the representative
sample. A total of 126 dairy farms were choosen for the survey. The sample was taken
from Northern, Middle and Southern areas of the country. The data was collected
through questionnaire and interview of farmers. Information was obtained from the
farmers relating to capital, number of milching animals, fodders, veterinary services,
labours, medicine availability and total milk production. A total of 126 questionnaires
were sent, out of which only 120 questionnaires were considered.

The study was conducted and the data obtained were analysed. The result of the study
reflected that all the dairy farms which were considered for the study were inefficient
when both Constant Return to Scale (CRS) and Variable Return to Scale (VRS) were
considered. Data Envelopment Analysis (DEA) technique reflected that most of the
dairy farms of Jordan during the study period were not performing efficiently. There is a
requirement to increase the degree of technical efficiency of dairy farms of Jordan.
Various Farm Extension Services are available to provide various consultancy services
to improve the efficiency of dairy farms.
2.11 Employment Generations through Dairy Farming in District Moradabad.

Nizamuddin Khan, Ashish Kumar Parashari (2014) In India maximum milk is

still produced by the small farmers having two to three milching animals. After
independence, the policy makers realized the importance of dairy sector, which is
available at village level and is capable of generating employment at village level and
transform the socio-economic condition of rural areas. The present study was
conducted in Moradabad district of Uttar Pradesh. Five villages of this district were
considered and the entire study was based on primary data collected from the farmers.

The present study has been done with an aim to find out the land holding of dairy
farmers, various employment modes of dairy sector, caste wise employment of farmers
in dairy sector and also determine the problems being faced by dairy industry.

Moradabad district of Uttar Pradesh has a population of 47,73,138 as per 2011 census.
It has got the sex ratio of 903 and the literacy rate is 58.67 percent. The district has
been divided into three sub divisions/ Tehsils having eight blocks. Three species of
animals have been taken into consideration namely buffalo, goat and cattle. Primary
data were collected using stratified random sampling method.

Dairy farmers have been put into six classes namely, landless, marginal (having less
than one hectare), small farmers (having land between one and two hectares), Semi-
medium (having land holding of four to ten hectares) and large (having land holding of
more than ten hectares). After compiling and analysis of data, it came to the light that
only 14.62 percent were marginal farmers. Small farmers accounted for 20 percent of
the total dairy farmers. The highest participation was 34.67 percent of semi medium
farmers. The participation in dairy sector of medium farmers is 22 percent, large
farmers participation is only 4.67 percent.

Different operations in dairy farming which are considered for employment are rearing,
distribution, marketing and collection/ processing. After analyzing the data received it
came to the light that 70 percent of dairy farmers were engaged in rearing of milching
animals in five villages of Moradabad district. Thereafter, distribution accounted for
second highest percentage of 12 percent. Collection/ processing accounted for the
least percentage of 8.67 percent among the total dairy farmers.

Social profile of dairy farmers revealed that the percentage of other backward castes
reflected a share of 41.33 percent. Thereafter, second position was occupied by high
castes having the percentage of 32.66 percent. Scheduled Caste dairy farmers
accounted for only 27.33 percent which was the lowest engagement percentage of dairy
farmers when caste was considered as factor. Among Other Backward Castes (OBCs)
maximum participation was of Jat, followed by Jatav, Yadav, Kumhars and others.
Among High Castes category, the highest participation was of Thakur, followed by
Brahmin, Elite Muslims and others.

Problems faced by dairy farmers included feeding problem, absence of Standard Pricing
System, absence of ready market, lack of transportation system, unorganized markets,
lack of credit facilities, exploitation by milkmen and lack of veterinary facilities.

2.12 Opportunities and challenges in Indian Dairy Industry Supply chain.

Rajeev Kumar, Dr Raj Kiran Prabhakar (2013). The evolution of Indian dairy
Industry goes back to the time of British rule. It has evolved over a period and today
India is one of the largest producer of dairy products in the world. Operation Flood
which was launched by Govt of India and implemented by National Dairy Development
Board (NDDB) brought White Revolution to India. Inspite of high production of milk and
milk products, a dynamic supply chain has become important in the dairy industry. This
study has been done to identify various challenges to dairy industry supply chain and
identify the various infrastructure development which should be undertaken to evolve
an efficient supply chain. This paper has also tried to find out the ways and means how
Indian Dairy Industry should overcome the various global challenges.

Today Indian Dairy consists of 22 various state milk federation, one lakh ten thousand
dairy cooperatives. Indian Dairy Industry constitutes organised and unorganized
sectors. Organised sector handles about 20 percent of milk and milk products whereas
unorganized sector handles about 80 percent of milk and milk products. Indian Dairy
constitutes 30 percent of the share of Processing Food Category in India. It is followed
by grain based products which accounts of 26 percent and edible oil constitutes 9
percent. Thereafter comes pulses, fruits, vegetables, sugar and various sugar products

Supply chain of Indian Dairy Industry starts from supplying the fodder and feed for
animals, providing vetenery aids for cattle. Milk is taken out by the farmers from the
milching animals and taken to the cooperative society point established at the village
level. Thereafter, once the milk is collected at cooperative society point, the collected
milk is taken to the Dairy Plant. At the Dairy Plant the processing, packaging of milk
and milk products take place and thereafter it is transported to various parlours for sale
to the consumers.

There are various issues and challenges at small and marginal farmers level. This
includes inadequate feeding of cattle, large number of spread of various diseases,
inferior genetic capability of animals, paucity of chilling facility, milkmen who exploit the
farmers, rising production cost of milk and delayed payment to the farmers.

Certain issues and challenges at collection level includes maximum small or marginal
farmers, involvement of large number of intermediaries, dissemination of information,
lack of screening system, paucity of infrastructure, quality of milk manipulation by

Processing level challenges include seasonal production fluctuation of milk, paucity of

quality standards, food safety and paucity of trained manpower.

Storage and logistic level issues and challenges include paucity of cold storage
infrastructure, lack of efficient transport facility and gap in the cold chain.

Cooperative level challenges include decreasing member farmers of cooperative,

participation of farmers in decision making, increasing losses, tough competition
regarding pricing of milk, lack of infrastructure and services.

Various marketing level challenges include unorganized markets, consumer base

acceptability, less participation of rural market and paucity of transport pricing
2.13 Estimation of Cost Efficiency of Dairy Farms in Kenyas Eastern Central

Dr Mugambi David Kimenchu, Dr Wambugu, Stephen Kairu, Dr Maina Murangi, Dr

Gitunu Antony Macharia (2014). The aim of this study is to find out the
cost efficiency of dairy farms of cows in kenya. The primary data was collected through
a survey in the region consisting of 135 farms. Thereafter, Fischers formula was used.
Maximum Likelihood Estimation (MLE) revealed that lion portion of dairy farming cost
consisted of costs of roughages and labour. Average land size owned by them came to
two acres only. Most of the dairy farms did not make any profit. Authors of the
research paper tried to establish the least cost for dairy farms keeping roughage and
labour into consideration.

Kenyas dairy sector has a history of hundred years and it ranks one of the largest in the
Saharan Africa. The dairy sectors accounts for 3.5 percent of the national Gross
Domestic Product (GDP). It provides the livelihood to labour. However, per cow yield
of Kenya has been of 6 kg for the last 30 years. The average price of the milk is above
average world market price. The present study is confined to Eastern Central highlands
of Kenya.

In this study Stochastic Cost Frontier method has been used. The data for the study
was collected, collated and analysed. The result of the study revealed that there exists
systematic inefficiency when cost of producing milk is considered. Cost of roughages is
the main challenges in the dairy farms in Kenya. The holding of small size land and
cost of labour are the other challenges. Productivity of labourers was low. The main
reason of high milk cost was not the inefficiency of the dairy farms.

The study recommends that the policy makers of Kenya should make necessary rules
and regulations so that the continuous land division is stopped. The law makers need
to make sure that the input costs of dairy farms are reduced. There is also a
requirement to reduce the taxes on the animal feeds and other industries associated
with it so that the overall cost of animal feed reduces. The cost of electricity also need
to be reduced. In addition to above, road infrastructure need to be improved which will
facilitate in reducing the input cost of milk production. There is also a requirement of
creating an environment so that fodder preparation is commercialized. Fodder
harvesting and equipments for bailing need to be made available. Above
recommendations if implemented would go a long way in reducing the cost of dairy
products in Kenya dairy farms resulting into better efficient dairy farms.

2.14 Comparative Study of Various Treatments for Dairy Industry Waste water.

Mrs Bharati S Shete, Dr NP Shinkar (2013). Large amount of waste water is

generated from dairy plants. This waste water is generated during cleaning and
processing of milk in the dairy plants. On an average two percent of the total milk
produced is wasted in the form of waste water. This waste water has characteristics of
very high Biological Oxygen Demand (BOD) and also Chemical Oxygen Demand
(COD). It generally contains lactose, detergents and other sanitizing agents. This
waste water rapidly reduces the oxygen level of the receiving water and results into
anaerobic conditions and releases very foul small. The complete water becomes a
breeding place for mosquitoes and may result into dangerous diseases like dengue
fever, chicken guniya and yellow fever. It may affect the life cycle of fish and algae. It
has been found to be toxic for fish. It causes various environmental pollutions.

Dairy Industry is involved in the manufacture of milk and milk products. It produces
milk, butter, cheese, flavoured milk, milk powder, condensed milk and ice-cream. It
involves various operations like Homogenization, Standardization, clarification,
separation etc. Dairy Industry is a polluting industry not only in terms of volume but also
in terms of concentration. The dairy industry produces 0.2 to 10 litres of waste water for
every litre of processed milk. On an average 2.5 litres of waste water is generated for
every litre of processed milk. Dairy waste water contains soluble organics, trace
organics, suspended solids etc. These constituents contribute towards high Biological
Oxygen Demand (BOD) and Chemical Oxygen Demand (COD).

There are a large number of methods to treat the dairy waste water. These methods
include various types of grease traps, oil water separators. Various biological
treatments include aerobic and anaerobic processes. Sometimes in the beginning,
anaerobic treatment is done followed by aerobic treatement to reduce the soluble
organic matter. Biological Nutrient Removal (BNR) is used for reduction of nitrogen and
phosphorus in the dairy waste water. At times some conventional treatments of dairy
waste water is done by aerobic processes such as activated sludge, aerated lagoons,
trickling filters etc or a combination of these aerobic processes. In one of the study on
the dairy waste water management, it has been claimed that Sequential Batch Reactor
is the most sort after technology for treating dairy waste water. The aerobic biological
treatment has certain drawbacks, and the most important drawback is the requirement
of high energy for this process.

Fixed Film Processes have the advantage of small sized reactor. It has high reliability
and simple operation. It is a cost effective system for biological treatment. An aerobic
Fixed Bed Reactors (AFBR) is the system which has been used successfully and widely
in the treatment of dairy waste water. This is easy to acclimatize and can overcome
various variations and shock loads without processing failure. The construction, its
operation and maintenance cost is lower than those required for other reactors. These
characteristics make this technology extremely useful for treating the dairy waste waters
generated by dairy industry.

2.15 Structural Changes in Dairy Farming for better margins and local Economy
Development in Indian Context.

Anil Chand, Vivek Swami, Dr Jaimini Tipnis (2015). India is basically an

agriculture dominant economy where about 70 percent of its population is living in the
villages. They are dependent on agriculture and other allied traditional activities. Their
livelihood mainly depends on agricultural land and rearing of animals. These animals
may include cows, buffaloes, goats etc. Some of them are also dependent on poultry
and poultry products. These animals give them milk and milk products. However, their
land holding is generally less. Statistics says that more than 70 percent of the rural
population posses only 21.8 percent of land in India. However, this population owns
64.8 percent of the milching animals. In terms of category of farmers, poor, marginal
and landless labourers comprise of largest producer of milk.
Various studies show that larger dairy farms are able to produce the milk at a lower
cost. Small dairy farms are not able to generate adequate revenue. Only when they
operate at a large scale, the dairy farms are able to generate surpluses to invest in
infrastructure & buildings etc. Thus this study has been undertaken firstly to study the
factors affecting the efficiency of dairy farms, thirdly, to improve the economic efficiency
in dairy farms, fourthly, to suggest steps to improve the village livelihood.

There are large number of challenges for Indian economy. Indian population is
increasing with a rapid rate, hence there is a huge challenge of feeding these growing
population. Other challenges like climate change, urbanization, depleting water
resources, farm land/ grazing land paucity are important. Various features of Indian
Dairy include, India being ranked as one of the largest producer of milk, 85 percent of
milk in India is still sold in loose form, 15 percent of milk is sold through retail chains.
The demand of milk and milk products is fluctuating. Now a days, the consumers have
preference of branded products.

Govt has been providing subsidies to dairy sector from time to time for improving the
infrastructure for milk collection, processing, testing and marketing. Dairy farming has
strengthened the rural population of India, specially the marginal farmers having less
land holdings.

Large dairy farms are able to generate returns for the betterment of this sector,
whereas, small dairy farms are not able to generate adequate revenue. Large farms
are able to produce milk at a lower cost than the smaller farms. Therefore, there is a
need for the government to promote the establishment of large dairy plants in India.
Seeing the challenges from the unorganized sector, there is all the reasons that large
dairy plants are the need of the hour.

By the year 2030 the demand of milk and milk products is likely to grow at a rate of 9 to
12 percent. Thus, there is an urgent requirement to meet this growing demand of local
economy. More emphasis need to be given to increase contract farming, there is a
requirement to focus on the production of fodder. There is a need to establish more
feed plants to meet the demand of growing dairy industry. These steps will go a long
way in improving the dairy farming in India.

2.16 Computer Applications in Dairy Industry

M A Deshmukh, SS Chopde, SD Kalyankar, VD Kele (2015) Dairy Industry has a

special position in the agriculture sector Industries. Specialty of dairy industry lies in the
fact that milk is produced every day by the farmers and it generates daily income to the
farmers. Dairy Industry affects the marginal farmers and it is a labour intensive industry
which provides employment to large number of population. Milk is also used to make a
large number of milk products like Ice-cream, milk powder, Gulab Jamun, Cheese etc.
Today, most of the dairy plants face major challenges of outdated automation system.
The complex collection system, production, packaging and marketing need to be
controlled and analyzed in a integrated manner to achieve the desired result.

Dairy Industry has some specific features like, firstly, milk is produced on daily basis,
which need to be transported immediately to dairy plant for processing, packaging and
marketing, secondly, most of the milk producers are marginal and small scale farmers,
thirdly, Indias major milk market is still in the hands of unorganised sector, fourthly, milk
is liked by all due to its nutritional value and its capability to be transformed into various
milk products.

There are various applications of computer in dairy industry. The first application is in
milk procurement and billing. Data analysis of various milk supplying centres based on
variant quality and quality can be done easily by computer applications. It has proved to
be a boon in managing the information regarding collection of milk, monitoring of quality,
inputs regarding various technical data, artificial insemination and payment to the
farmers who are producing milk. Milk routes can be scheduled with the availability of
data bank on milk routes, vehicles capability, reception and arrival timings and quality
Product composition optimization is another field where computer application can play a
very vital role. When the milk is received from the milk producers at village collection
centre, quality of milk need to be measured. Thereafter, quality is again measured
when the milk is received at dairy plant. Thereafter, the quality need to be measured
before the milk is packed and sent to the market for consumers consumption.

Computer application is used in overall dairy plant automation. Data is initially captured
by computer for milk quality and quantity. Thereafter, based on the collection of milk
and demand from the market, planning is done for dispatch and marketing of milk and
milk products. A computer application can accurately measure and control the milk

Computerised accounting system is generally common in most of the industries and

establishments. Input data is fed into the system as on transaction basis. Thereafter,
the system gives out all the reports and returns as per the requirement of office. Final
output or summary is prepared without any loss of time promptly. All the reports
regarding profit, loss, balance sheet are generated promptly.

In addition to above, various computer applications are used in dairy industry for
packaging, preventive maintenance, supply chain integration and traceability, vendor
development etc. These computer systems are generating detailed and accurate
documents of dairy industry under computer control. These reports contain all the
information regarding the dairy plants. The use of such computer applications are on
increase in the dairy industry. As the computer system cost decreases and the
hardwares are made robust, their applications will increase many fold in the dairy
industry. These computer based applications will go a long way in integrating the dairy
plant systems and providing the various datas required by the management without any
loss of time.

2.17 Working Capital Management of Rajasthan Cooperative Dairy Federation

Ltd in India.

Dr SP Mathur, Rekha Swarnkar, Yogesh Soni (2014). Aim of this research paper
is to study the liquidity management of various dairy cooperatives of Rajasthan
Cooperative Dairy Federation. Working capital management is the life line of any
organisation/ business venture. All business organisation require certain amount of
fund to continue its day today operations and also produce goods for sale in the market
to earn profit. A positive working capital is a must for a business organisation so that it
is able to continue its day today operations/ working and they are still left with sufficient
funds so that they are able to look after its short term debt and other operational related

Rajasthan Cooperative Dairy Federation (RCDF) was set up in 1977. It was registered
in 1965 under the Rajasthan cooperative society act. In addition to RCDF, dairy
infrastructure in India is spread over 23 states, comprising of 170 district milk unions
and one lakh village cooperative societies located in the rural part of Indian territory.

Various tools have been used for analysis. The first one is the current ratio, which is
also known as liquidity ratio or working capital ratio. It is shown by current asset of a
business divided by its current liabilities. In terms of formula it can be represented as
current ratio = current asset/current liabilities. If the current ratio of a business
organisation is 2, it would mean that current asset of organisation is sufficient to look
after for two times the amount of that organisations short term liabilities. Thus, working
capital ratio is an indicator whether that business organisation is in a position to support
itself with the present current assets inspite of their current liabilities.

Secondary data has been collected from various sources like annual reports,
magazines, newspapers, various websites and periodicals. Various officials of saras
dairy were contacted, questionnaire was prepared and filled by the respondents. The
study was confined to five units of Rajasthan Cooperative Dairy Federation. Three
hypothesis were tested. First hypothesis was, proper handling of working capital
improves profitability and liquidity of any business organisation. Second hypothesis,
was the external sources like banks were liberally used in financing the working capital.
Third hypothesis was, that there is more scope for improvement of working capital of
dairy plants.
The ideal working capital ratio is 2:1, whereas Ajmer union working capital ratio came
out to be more than 2:1 for the year 2009 to 2013. Alwar union statistics has shown that
in the year 2010 and 2011, this union has more liabilities than current assets, which is
not a good sign of finance. Alwar union has not got ideal working capital ration of 2:1.
Bhilwara milk union statistics shows that from the year 2009 to 2010 the working capital
ratio of 2:1 has been maintained. However, in the year 2011 and 2013, there is more
liquidity compared to the ideal working capital ratio of 2:1. Thus, Bhilwara Milk Union
could use this fund for some other useful work. Jaipur Union statistics shows that in the
year 2009 and 2011, the liquidity position is below ideal liquidity ratio of 2:1. However,
in the year 2012 and 2013 the union improved the workig capital ratio to 2:1. Thus, the
condition has improved in the year 2012 and 2013 as compared to previous years.
Thus, it is clear from the above study that working capital management is an important
part of overall financial condition of a business organisation. Any business organisation
like dairy union may exist without profit, but it will be difficult for it to exist without
sufficient liquidity.

2.18 Cleaning in Place (CIP) system in Dairy Plant.

Amitha Thomas and CT Sathian (2014) The present research paper covers the
cleaning in place system of cleaning inner surface of various types of pipelines, filters,
vessels, equipment and other things without dismantling it. This system is more
applicable for those industries which require high level of hygiene e.g dairy,
pharmaceutical, beverage, processed food, cosmetics and brewing industries.

Cleaning in Place (CIP) is using various types of detergents, disinfectants and sanitizers
for cleaning the inner surface which can not be physically cleaned with hand or any
other tool. The detergents used in cleaning in place system may be either alkali or acid.
The most commonly used alkalies are sodium hydroxide, sodium carborate and
potassium hydroxide. Acid, detergents which are generally used may include
hydrochloric acid, phosphoric acid, nitric acid and citric acid.

Alkali detergents are those which have a pH higher to 7. These type of alkali are
generally used in dairy industry because of the fact that they convert fat into soap and
soap can be easily removed with water. These generally consist of caustic soda
(sodium hydroxide), caustic potash (potassium hydroxide), soda ash (sodium
carbonate) and sodium silicates. In dairy industry, milk stones are formed in pipelines
which are removed by caustic soda alongwith wetting agents that break up protein into
water soluble forms and flushed with water.

Most common acids which are used in dairy cleaning are inorganic acids like nitric acid
and phosphoric acid and also the sulphuric acid. Certain organic acids like gluconic
acid and hydroxyacetic acid are used. After alkaline wash, there is a requirement to
give acid detergent wash to remove any elements of alkaline from the inner surface of

Various types of disinfectants used in the industries handling food processing may
include hypochlorite, ozone, hydrogen peroxide. Sanitizers which are based on
peroxygen can eliminate spores, but it may lead to corrosion at high temperature and

Water supplied from bore well is the main source of microbial contamination. Most
commonly test applied to determine the micro organisms presence in flush water is by
counting of potable water. Cleaning in place methods with small volumes and less
temperature, like enzyme based cleaning and one phase alkaline clearing turned out to
be the best alternatives for the impacts like global warming, photo-oxidant formation,
acidification and autrophication.

Thus, cleaning in place system in dairy plant/ industry consist of the use of different
types of sanitizers or disinfectants, detergents for cleaning and these items can be
stored and re-used for the cleaning purpose on next day. This will bring economy in the
cleaning processes in various factories and plants. However, prolonged and repeated
use may lead to build up of thermoduric organisms inside the equipment or pipeline and
subsequently may be passed on to pasteurized milk. Therefore, there is a requirement
to revise the cleaning in strategy so that hygienic and good quality product is produced.

2.19 Implementing of lean Manufacturing Tool in Dairy Industry.

J Vignesh, B Varun Kumar (2015) Lean manufacturing tool is an approach in
which the main aim is to cut out the waste while the quality is ensured. This is a
Japanese approach to management. This approach is applicable in all fields of
business, including design, production and distribution. Lean production aims to cut out
the costs by making them more friendly to the market. This approach puts emphasis to
cut out all activities that does not add value to the production process like holding of
stock for a longer time, moving of stalks from one place to another place without any
aim or addition to the product value. This aims to make the work more simple, easy to
understand, do and manage all the affairs.

Various types of wastes have been discussed in this research paper. The first waste
which has been discussed is the transport. It amounts to saying that products are
moved from one place to another place which are not required to do the processing.
The second waste is the large inventory which are not being processed but kept in the
godown of the industry/ factory. The third waste is the motion. Men or equipment or
material are moved without any requirement for processing. The fourth waste is the
waiting. It includes the various interruptions between two shifts. The fifth waste is the
overproduction. Under this waste, items are produced more than their requirement in
the market. The sixth waste is the over processing, which amounts to working on a
product more than its requirement. The last and the seventh waste is the defects. Any
defects in the processed parts are called waste.

There are various steps which should be taken to achieve lean systems. It includes,
firstly, designing a simple manufacturing system, secondly, recognizing that there is
always scope for improvement in all aspects of life, thirdly, continuously improving the
lean manufacturing system.

When designing a simple manufacturing system is considered, it amounts to saying

demand based manufacturing. Inventory is pulled out only to meet the customers
need/ order. There are various benefits of this. The first benefit is the decreased cycle
time. The second benefit is the fewer inventories. The third benefit is the increased
productivity. The last benefit is the increased capital equipment utilization.

Value stream mapping is a lean management method in which the current state is
considered alongwith future state. At Toyota this is also called material and information
flow mapping. Thus, this research paper presents the lean thinking and its various
concepts through various definitions from various literatures.

The main emphasis of lean manufacturing is to reduce waste at all steps and also doing
the things better with the half of resources, providing better quality with lower cost.
Good understanding of lean principles are required for a successful lean practices.
However, without knowing the lean principles short term success may be achieved, but
may fail in long term strategy. The research paper also discusses the various barriers
and enablers of lean principles and practices.

2.20 Determinants of Economic Efficiency in Dairy Cattle and Sheep.

M Michalickova, Z Krupova, E Krupa (2014). This research papers objective is
to analyze the various determinants of economic efficiency in the field of milk production
and also on dairy cattle and sheep. It was evaluated on the basis of profit to cost ratio
and by individual indicator of the profit to individual cost. Profit to cost ratio on these
costs was the lowest.

Economic dependence of animal production is very closely associated with biological

efficiency of breeding. In the research paper, the economic efficiency of milk production
in cattle and sheep were calculated for the period from 2006 to 2012. The data was
collected from 141 cattle dairy and from 51 sheep dairy farms names of which are
recorded in the database of Animal Production Research Centre (APRC).

Basic economic indicators in the cattle farms over the mentioned analyzed period
indicated that profit in milk production was only achieved in year 2007 and 2008. Unit
milk production cost increased mainly due to higher feed prices and also the
cancellation of tax benefits for the fuel. On the other hand compared to dairy cattle
herds, the economic efficiency of sheep was influenced by two products.

2.21 Economic Efficiency (EE) of small holder Dairy Farmers in Swaziland.

BB Masuku (2014). Aim of this study was to find out the economic efficiency of
small holder dairy farmers of Swaziland. The dairy farmers of Swaziland have been
classified under three categories, namely, the small holder farmers, then the medium
scale farmers and lastly the large scale farmers. The aim of the study was also to
identify various factors which affect the economic efficiency and determine the profit
making margin of the small holder dairy farmers. This survey targeted all the small
holder dairy farmers who are registered with Swaziland Dairy Board. Random sampling
and purposive techniques were used to select the respondents. Mainly three methods
were used for data analysis. These three methods included; Descriptive Statistics,
Economic Method and Gross Margin Method. The economic efficiency which was
calculated came to 79.8 percent. Various factors which influenced the Economic
Efficiency of small holder dairy farmers included; dairy farms location, land holding in
terms of size, fertility of soil, availability of water, dairy farmers association membership
and various types of training undertaken by small holder dairy farmers on dairy farming.
In addition to above other factors which affected the economic efficiency included socio
economic, institutional factors and various farm characteristics. Dairy farming is a
profitable venture for small holder dairy farmers.

Swaziland Dairy Board (SDB) regulates all the dairy industry in the country. Dairy
farmers in Swaziland have been divided into three categories which are namely; small
holder farmers (farmers having one to ten cows), medium scale farmers (farmers having
eleven to forty cows), and lastly large scale dairy farmers (farmers having more than
forty cows).

In Swaziland, the demand of milk is more than the supply. In the year 2008, the annual
demand of milk in the country was 56 million litres, whereas milk production was only
8.4 million litres. Thus, there was deficiency of 47.6 million litres, which was overcome
by imports. During the financial year 2009-10, the demand of milk was 52 million litres
per annum whereas, the milk production was only 7.52 million litres. The deficiency
was to the tune of 44.48 million litres. Various challenges in milk production in
Swaziland are high milk production cost, rising feed costs, cattle veterinary cover from
diseases. Thus, though there is a huge market for the milk, but the production of milk is

Government of Swaziland and Swaziland Dairy Board have taken various steps to
increase the production of milk in the country. However, small holder dairy farmers are
still facing the problem of high input cost, low production, leading to reduced profit
margins. The reason for reduced profit margins could be due to inefficiencies in the
dairy industry.

This study tested two hypotheses namely small holder dairy farmers are basically
economically inefficient and socio economic farm characteristics and institutional factors
generally have no effect on economic efficiency of dairy farmers. Findings of this study
is important for the Government of Swaziland, ministry of agriculture, Swaziland dairy
board and various dairy plants.

Efficiency is one of the most important facet of any organisation. It may consist of
technical efficiency and allocative efficiency. Technical efficiency is achieved when a
high level of output is obtained by using minimum inputs. Allocative efficiency can be
defined as the ability of a firm to produce the given level of output at the low cost way.

Research questionnaire was in three parts. First part was based on the various factors
which affect Economic Efficiency (socio economic and farm characteristics, institutional
factors), second part was on the basis of various technical factors and the third part was
based on costs and returns for the small holder dairy farms. Primary data was collected
and analysed.

The result of the research paper revealed that 67 percent of the small holder dairy
farmers were male whereas 33 percent were females. The age of small holder dairy
farmers was from 31 to 75 years. About 32 percent of the small holder dairy farmers
were of the age from 51 to 60 years. The mean age of sampled small holder dairy
farmers was 55 years. The strength of married sampled small holder dairy farmers was
89 percent. The strength of household dairy farmers was 89 percent. The strength of
household size was 4 to 8 members in respect of 68 percent of the small holder dairy
farmers. It further came to the light that 37 percent of the small holder farmers had
dairy farming experience from 11 to 15 years. The average experience of small holder
dairy farmers was 11-14 years. Maximum dairy farmers to the tune of 98 % of the
sample size had additional income to the one they got from dairy industry or they had
other source of income than the income they got from dairy industry.
The research finally concluded that level of economic efficiency of small holder dairy
farmers was 79.8 percent. Thus, only 20.2 percent small holder dairy farmers were the
potential farmers who had to put in more effort to increase their economic efficiency.
Thus the first null hypothesis regarding economic efficiency of small holder dairy
farmers was rejected and alternate hypothesis was accepted stating that small holder
diary farmers of Swaziland are efficient. The second null hypothesis was also rejected
and the alternate hypothesis was accepted regarding affect of socioeconomic and farm
characteristics, institutional factors on the economic efficiency of small holder dairy
farmers of Swaziland.

2.22 Milk Cost, Return and Profitability in Dairy Farming.

Agatha Popescu (2014). Aim of this research paper is to examine the

relationship between material cost and labour cost. In addition to this, aim is to estimate
the effect of material cost and labour cost on the returns and profit coming from the milk.
This study is basically based on the primary data collected for the period of 2011-12
from five small dairy farms of south Romania.

It came to the light after analysis of data that income coming from marketed milk is
closely related to material cost, current and main equipment repairs, fuel and lubricants
cost, feeding costs and depreciation of fixed assets. There is a close and positive
relationship between income coming from marketed milk, material cost and labour cost.
Total variation of the material cost and labour cost on the variation of income from
marketed milk was substantial. When the labour cost was taken as constant, influence
of material cost variation as a whole and also by the cost item on income could be
ignored, since it had a low value. When the material cost was taken as a fixed factor,
the effect of labour cost variation had a considerable value and for this reason only it
deserves to be taken into account when we analyse its effect on income.

The research paper concludes by stating that the material cost and labour cost
represent the most important cost in total milk production cost. They are closely related
to the income from marketed milk. For the same labour cost, in the dairy farms,
material cost has a negative effect on income. In the dairy farms where material cost is
kept as constant, labour cost is co-related with income coming from marketed milk.

2.23 Method of formulating least cost diets for small holder Dairy Production in
Sub Saharan Africa.

Sebastian Chakeredza, Festus K Akinnifesi (2008). Small holder dairy farmers

face a huge problem of supply of good quality feed for the cattle specially during dry
season. Commercial off the shelf protein concentrates are available at selected
locations but are very expensive and are not accessible to small holder farmers. To
overcome this problem, multipurpose forage legumes and some other non-conventional
protein sources have been promoted as an alternative cheaper protein rich feed. The
main problem for these small holder dairy farmers is the formulation of balanced diets
with the key nutrients and also cost effective.

This research paper presents a step by step procedure for diet formulation for small
holder dairy farmers. This procedure gives the flexibility of the diet to be balanced with
all key nutrients, low cost and the user has all the flexibility over its formulation process.
This particular ration making process has been recommended for use by small holder
dairy farmers or their staff to formulate the low cost feed using locally available feed so
as to optimize its cost and formulation of feed at farm level.

Feeding of dairy cattle has mainly four main aims. Firstly, assessment of the nutritive
value of feed. Secondly, description of the nutrient requirements of animals. Thirdly,
ration formulation and fourthly diagnosis and prevention of disorders of nutrition and its
metabolism. The nutrients to be supplied in the feed include energy, minerals, proteins
and vitamins. Carbohydrates, fats are the main source of energy. In sub-saharan
Africa, the major sources of energy are maize, sorghum, maize bran and barley.
Vitamins and minerals are incorporated in the diets as per mixes. Protein source like
cotton seed meal and soyabean meal are used to provide protein requirements. Over a
period of time fodder trees and legumes are being developed and widely used by small
holder dairy farmers particularly in Southern and Eastern Africa.
In the research paper it has been described as to how Excel sheet can be used by
extension worker or small holder dairy farmers for daily meal feed formulation with a
special focus on the inclusion of locally and readily available feed at the farm level.

The first step in the formulation process is the creation of feed database. It includes the
details of various available ingredients, its cost and chemical composition as a part of
database. The second step is to lay down resultant feed quality which is required to be
formulated based on the weight of cattle and its milk production level. Third step is the
selection of feed ingredients. The first choice of feed are those which are locally
available and are cheap. The fourth step is working with excel formulae. This formula
calculates crude protein (CP), metabolic energy (ME) and also the cost of the
formulated feed.

The method which has been formulated in this research paper gives user the full liberty
over the diet formulation process. The user can choose ingredients, chemical
composition in case of any new information, change the ingredient cost depending upon
its cost in the market. This method has advantage over the software packages which
are pre-programmed and do not give much flexibility to the small holder dairy farmers.

2.24 Least cost Diet Plan of Cows for Small Dairy Farmers of Central India.

SN Goswami, A Chaturvedi, S Chatterji (2013). Central India comprises Madhya

Pradesh, Maharashtras Vidarbha region and Chhattisgarh. In central India, the small
dairy farmers face the problem of inadequate protein source feed for milching animals/
cows during the dry season. Costly commercial protein concentrates are beyond the
reach of poor dairy farmers. Thus, there is a need to formulate a cost efficient diet plan
which is balanced, easily available and a good protein source.

This research paper has made an endeavour to formulate the least cost ration plan for
daily feeding for the cross bred and local cows separately. The first least cost ration
plan was formulated for cross bred dairy cows giving 5 to 10 litres of milk per day. Their
feed included 3.5 kg of paddy straw, 10.6 kg of Napier grass, 1.3 kg of soyabean cake,
2.08 kg of wheat bran and 0.06 kg of mineral mixture. The total cost was 19 percent
less than the routine feed cost. Similarly, second least cost ration plan was formulated
for local cows giving 3 litres of milk per day. This ration plan included 3.06 kg of paddy
straw, 7.6 kg of napier grass, 0.86 kg of soyabean cake, 1.2 kg of wheat bran and 0.05
kg of mineral mixture. This combination of ration plan reduced the cost of feed by 22
percent when compared to the present existing ration plan being used by the farmers.
The authors have recommended to use the two least cost ration plans by the small/
marginal dairy farmers of Central India.

Feed cost generally accounts for 60 to 80 percent of variable cost of milk production.
Nutrients to be supplied in a feed includes energy, protein, minerals, vitamins,
carbohydrates and fats. In central India, maize paddy straw, sorghum, wheat bran are
the major part of energy. Minerals and Vitamins are included in the diet as pre-mixes.
Protein is supplied through soyabean cake. Now, there is a requirement to formulate a
ration plan which is balanced having all constituents like protein, vitamins, minerals and
energy and also having low cost.

To calculate the primary data, 200 small dairy farmers were selected. Out of 200,
farmers having cross bred cows were 100 and farmers having local cows were also 100
in number. In the present research, two kinds of nutrient restrictions were
experimented. These were namely maximum restrictions and minimum restrictions.

Maximum restrictions were meant for dry matters since the belly capacity of milching
animal is fixed. Dry matter intake was based on actual amount of roughages and
various concentrates for the milching cows. Minimum restrictions were meant for Total
Digestible Nutrients (TDN), Digestible Crude Protein (DGP), calcium and phosphorus.

In the first situation, the least cost plan brought down the ration cost for cross bred cows
from Rs 111.12 to 90 rupees. The least cost plan used only five ingredients instead of
13 being used in original feed plan. In the second situation, the least cost feeding plan
reduced the ration cost for the local bred cows from rupees 75.57 to rupees 58.56. In
this type of least cost plan also only 5 ingredients were used compared to 13 in the
normal feed plan.

Napier grass was constituents of both types of ration plans mainly due to high dry
production, good fodder quality, tolerance to drought and persistence nature under
frequent harvesting. Paddy straw provided neutral detergent fibre, acid detergent fibre
and protein. Wheat bran is required in both ration plans inspite of this being costly than
wheat broken, because bran is high in total digestible nutrients. Low cost locally
produced Napier grass was also used in both the ration plans. Paddy straw and Napier
grass gave energy, soyabean cake provided the protein, mineral mixture provided
minerals like P, Ca, Mg, Fe, Zn, Cu and Iodine.

The result of this study if incorporated by the small farmers of Central India will go a
long way in reducing the milk production cost and increasing the profit of the dairy

2.25 Growth and challenges of Dairy Sector in Andhra Pradesh.

Thunga Subha Rayudu, Prof C Lakshmi Nath (2015). Dairy Industry constitutes
an important part of overall Industries of the country. India has turned out to be the
largest producer of milk and also its largest consumer due to large domestic market.
Dairy Industry directly affects the socio economic development of rural economy, since
maximum population who are the producer of milk belongs to the category of small
farmers belonging to the rural India. Out of the complete production of milk in India, 73
percent is consumed in the form of liquid milk and balance of 27 percent is consumed in
the form of other milk products like cheese, butter, ghee, paneer, curd, sweets and ice

There are sixteen dairy plants in Andhra Pradesh. The market share of milk and milk
products in the year 2013 in Andhra Pradesh was as under. 73 percent of the total sale
value comprised of liquid milk. 8 percent each comprised of milk powder and ghee. 4
percent was of ice cream. 3 percent comprised of butter and 1 percent comprised of
curd, flavoured milk, paneer and cheese each.

Major challenges of dairy industry in the state of Andhra Pradesh are preservation of
collected milk at village level, hygienically clean milk production, new product
development, operational efficiency of dairy plants, cost reduction, shelf life, storage
and packaging technology, exports, environment friendly treatment methods, feed of
animals, large number of intermediaries, lack of infrastructure, quality control, cold
storage facility and transparent milk pricing system.

With the Word Trade Organization (WTO) agreement of 01 April 2001, the imports and
exports of all products including dairy products have been liberalized. This has come
both as opportunity for growth and also a threat for its growth. Dairy Industry should
take this opportunity as a challenge by broadening the dairy products range, which may
have considerable demand in the market. Cheese, varieties of milk shakes, pedha,
paneer, shirkhand, ice cream are the few milk products range which should be exploited
by the dairy industry.

2.26 Marketing Effectiveness of Sales Promotion Strategies on Dairy Industry.

S Ayyappa Naik Nenavath (2014). History of Dairy Industry in India goes back to
the time of starting of Indian civilization. It is only in India, where cows and buffaloes
are being worshiped by the people. Milk and milk products consumption is an integral
part of the food for Indian population. During the period of Mahabharata in 2500 BC,
butter was taken out of milk to ease the movement from Gokul to Mathura. Lord Krishna
has been considered as the savior of cows.

In this research paper, authors objective is to evaluate the various strategies taken by
Sangam Dairy for its sales promotion. Opinions of the customers have been taken into

Survey method has been adopted. Both primary and secondary sources of data have
been used. Primary data was collected from the customers belonging to Guntur and
Ponnuru towns of Andhra Pradesh. Whereas, secondary data was collected from
various publication like Yozana, National journal of rural development, Indian Dairyman,
kisan world etc. Collection of data was based on stratified random sampling method.
80 respondents both from Guntur and Ponnuru were considered, thus making a total of
160 respondents.

There are two major decisions which are required to be taken regarding promotion of
products by the dairy plant. Firstly, how much investment should be done in promotion
of a product and secondly, regarding the relative usage of various promotional tools. It
is difficult to quantify the above details due to various variables and lack of data on the

However, author has come out with few suggestions based on the research undertaken
by him. The first suggestion is regarding improving the packaging technology for
extended shelf life of milk and milk products. Second suggestion is seize the problem of
leakage. It has been suggested to take corrective step at packaging level,
transportation level and also when the products are being delivered to the customers.
The third suggestion has been given to advertise the prices of all products during
advertisement through sign boards, print and TV media. The fourth and last suggestion
given is to keep the Sangam Dairy outlets open for longer time, so that the products can
be delivered to all the customers as per their requirement.

2.27 Indian Dairy Industry.

Bhagyashree S Kunte, Prof Sanjay Patankar (2015). In this research paper, an

effort has been made to understand the present position of dairy industry India. In this
study, 24 research paper data in respect of different states have been randomly
selected. After the study of all datas and their analysis, it revealed that dairy industry in
India is facing the problem of paucity of fodder, lack of veterinary cover and information
and technology support. Some of the issues were specific to a particular state. In state
like Assam, milk and milk products is not the major component of the food of people.

After independence, India was deficient of milk production. However, operation flood
transformed India from a deficient milk production state to the largest milk producer of
the world. However, there are large number of pitfalls. Average milk yield of cows in
India is one of the lowest in the world. Milk yield of buffaloes is comparatively modest.
If yield of cows and buffaloes are put together, the milk yield is still much lower than the
world average milk yield of cattle. 96 percent of the milk produced in India comes from
cows and buffaloes.

The main findings of the majority of the research papers are given below in succeeding
para. First finding revealed that the herd size with the Indian farmers was small and the
cattle size was below fifteen. Secondly, dairy is still considered as a source of living
and has not been commercialized in the rural India. Thirdly, major part of cattle feed
consists of fodder and various concentrates. Fourthly, main fields in which maximum
investment gets consumed in the dairy industry are the cattles and dairy infrastructure.
Fifth finding revealed that large number of dairy farmers do not account for the labour
cost and cost of green fodder obtained from their land towards the production cost of
milk. Sixthly, those dairy farmers who are the members of cooperative society are able
to obtain the veterinary services at a lower cost whereas those who are not the
members of a cooperative society spend substantial amount of money on veterinary
cover. Seventh finding revealed that cooperatives have positive impact on the income of
dairy farmers of rural India. Eighth finding revealed that large number of dairy farmers
are now procuring cross bred cattle for more milk production. Ninth finding revealed
that as the size of herd increases, the cost of per litre of milk production decreases.

2.28 Pasteurization Process Energy optimization for A Milk Dairy Plant.

Modi A, Prajapat R (2014). Dairy Industry in India is one of the main food
industries. In future, the demand of milk and milk products are likely to increase. This
sector has a great potential of providing employment of rural communities. The
processing of milk at dairy plant involves pasteurization process. Pasteurization can be
defined as a process of heating a liquid upto a temperature below the boiling point with
an aim of destruction of micro organisms. This process was initially developed in 1864
by Louis Pasteur with an aim to improve the quality of wine. Actually, pasteurization of
milk started in late 1800 in Europe and later in America. The pasteurization process
consumes large amount of energy mainly electricity and fuel.

The main purpose of pasteurization is the destruction of disease causing harmful

viruses, bacteria, moulds, protozoa, yeasts from the milk. Pasteurization also increases
the keeping quality of milk and milk products and increases their shelf life.

The most common method of pasteurization these days is High Temperature Short
Time pasteurization. In this process, the first step is to reserve the raw milk in silo tank
of large capacity. Second step is to heat the milk upto the temperature of 72 0C and it is
kept at the temperature for more than 16 seconds. The third step is cooling the milk
upto 60C or at lower temperature. The method of pasteurization is better than Batch

In the proposed alternative method of pasteurization we have to cool the milk from
300C-400C to 40C. The reduced heat input is required because the heating load in
raising the milks temperature from 400C-500C to 720C whereas in the present system
temperature of milk is raised from 40C to 720C. The proposed alternative method pays
back within 3 months of installation, hence it is recommended to be used by all dairy

2.29 Milk Production Function and Resource use Efficiency in Jaipur District.

Sushila Vishnoi, Pramendra, Vijay Gupta and Raju Pooniya (2015) This research
was undertaken in 2013 and 2014 for Jaipur District with an aim to find out input
output relationship and examine the resource use proficiency in the milk production for
various categories of herd size.

Live stock sector is playing a significant role in the Indias overall agricultural economy.
The milk production is influenced by basically two factor in cattle. These two factors are
genetic and non-genetic factors. We have no control over the genetic factor since it is
god given. However, non-genetic factors are within the control of human beings.
Various non genetic factors which influence the production of milk are various types of
feeds, labour, lactation, herd size etc. Thus, the study of these factors are important for
milk production.

Several researchers have carried out study on input output relationship in milk
production and various resource use efficiency in past in different parts of country. The
results were different for different areas depending upon the type of milk production
technology availability and various categories of milch animals. However, such study
was not carried out for the district of Jaipur of Rajasthan.

Jaipur district has 13 tehsils. Out of 13 tehsils, only 6 tehsils namely Jaipur, Amer,
Shahpura, Bassi, Phuera and Sanganer were selected. These 6 tehsils had 590
commercial dairy farms in total, out of which hundred commercial dairies were selected
on the basis of probability. These were put into three categories. First, consisted of
small commercial dairy farms having upto 31 milch animals. Medium commercial dairy
farms had milch animals from 32 to 45 milch animals. Large commercial dairy farms
had milch animals above 45 milch animals.

All the data was collected, collated and analysed. After the analysis it came to the light
that dry fodder, green fodder, labour and other various expenditures were statistically
important in small commercial dairy farm. In case of medium commercial dairy farms
dry fodder, green food and various expenditures were important. In case of large
commercial dairy farms, labour and concentrates were important. Resource use
efficiency result indicated that non of the marginal value productivity of various inputs
were significant for any herd size category except for labour in large herd size category.

2.30 Profitable Milk Business Through Self Help Groups in District of Rajasthan.

Dr Smita Bhatnagar, Dr SS Rathore (2015). Women empowerment is emerging as

a new strategy to bring equality and overall development of the society. Many policies
like saving the girl child, educating the girl child have been taken up even by the present
government. Empowerment means providing knowledge, resources, information and
power to take decision by women. In the state of Rajasthan, dairy cooperatives have
shown significant progress. Villagers who live in the far flung areas can also participate
by giving their produced milk at the village collection centres.

Krishi Vigyan Kendra, Chomu (Jaipur) organised a training and employment programme
for empowerment of women in the district of Jaipur of Rajasthan. Total of hundred
women who were participating in dairy farming were made its base.

Various plan of actions were prepared which included the better facility for marketing,
formulation of women development cooperatives, earmarking of vendors and
establishment of large number of milk collection centres at village level.

The study revealed that before intervention of training and employment programme
women devoted 30 percent of their effort towards agricultural labour. Very limited effort
was towards dairing activity. However, after the training and employment programme
50 percent of their effort was diverted towards the dairy. The income generated from
dairy activity was higher than the agricultural activity. Another major impact was
increase in the average milk yield and decrease in the dry period. The average income
of family increased from twelve thousand per year to thirty eight thousand per year.

2.31 Vermi Biofiltration - A Low Cost Treatment for Dairy Wastewater. Sarik
Telang, Hema Patel (2013). Lots of waste water is generated by Dairy Industry.
This waste water contains organic and solids. In most of the industries, the waste water
is treated in the Effluent Treatment Plant (ETP) of the plant, which generates lots of
sludge. Processing and disposing of sludge is itself very costly affair.

In the present study authors have discussed vermi bio filtration. It is basically a
combination of conventional and vermi composting. Earthworms perform the function of
bio filters. Due to this process Biological Oxygen Demand (BOD) of waste water
decreased by 97.95 percent. Chemical Oxygen Demand (COD) decreased by 91.64
percent. Total Suspended Solids (TSS) decreased by 76.39 percent and Total
Dissolved Solids (TDS) decreased by 84.27 percent. Contents of Oil and Grease
decreased by 84.13 percent in the waste water.

In the present study a vermi filter has been designed. The waste water of dairy is
passed from the top layer of vermi filter. The suspended solids are stopped on the top
of vermi filter, which is consumed and processed by earthworms. The complete
process is eco friendly, cost effective and efficient. The vermi filtered water is fit to be
used for any cultivation, irrigation purpose.

Vermi filter is made of various layers of gravel, followed by sand and then there is a
layer of garden soil and earthworms. The top layer is made of garden soil with
earthworm with a depth of 120 millimeter. Next layer is of aggregate of one to two cm
size and mixed with sand. Thereafter, is a layer of two to three cm of aggregate going
upto the depth of 30 millimeter. Thereafter, is the bottom layer of 4 to 5 cm of
aggregate having a depth of 40 millimeter.
The dairy waste water is passed down through various layers of vermi filter. It is
collected at the bottom after 24 hours. There is no considerable variation between
waste water and vermi filtered water as far as pH value is concerned. However, there is
removal of BOD, COD, TSS and TDS after vermi filtration. The earthworms consume
the solid biomass collected on the top layer. There is no sludge formation in the
process of vermi filtration. Instead of sludge, vermi compost is formed which is fit to be
used as fertilizers in the fields.

2.32 Economics of Milk Production in Alwar District (Rajasthan) :

A Comparative Analysis.

GL Meena, DK Jain (2012). This study has been carried out by the authors with
an aim to compare the cost of milk production, net return from milk production, milk
production, milk consumption, marketed surplus of milk among various herd size of
member and non-member of cooperative society dairy farmers.

There are large number of milk producers cooperative societies in Alwar. Out of them
six milk procurement societies were selected for the study. The dairy farmers owning
the milching animals were divided into three categories namely small farmers having
one to two milching animals, medium farmers having three to four milching animals and
large farmers having more than four milching animals. A total of 150 dairy farmers were
selected for data collection from member and non-members categories.

The collected data was analysed. It revealed that the maintenance cost of member
category was higher than the non-member categories. The maintenance cost of
buffaloes was more than the cows. It also revealed that maintenance cost was highest
in the summer season, followed by rainy season and least in the winter season.

Cost of per litre of milk produced is the actual efficiency of any category of dairy
farmers. Average per litre cost of milk is higher for Buffalo than cow. If we compare in
three different seasons, the average per litre cost of milk is highest in summer, followed
by rainy season and is the lowest in winter season.
When net return from milk production is considered. Net return was higher from
buffaloes than cows across the board for member and non-member groups. If the net
return of buffalo and cow are considered, it was found to be higher in respect of
members than the non member groups. During the summer season also the net return
was positive in case of member groups, whereas it was negative in case of non-
member groups.

Overall milk production of member groups was higher than the non member groups.
Average highest milk production recorded was in winter season amounting to 15.06
litres, in rainy season it was 11.32 litres and in summer season it further dropped to
10.52 litres in case of member groups. Whereas it was lower for the non-member

Average milk consumption per household per day was higher in case of member group
than the non member group. The average milk consumption was highest in winter
season, followed by rainy reason and then the summer season across all herd size.

Average marketed surplus of milk across all the herd size was higher for member group
than the non member group. The highest quantity of marketed surplus of milk was
recorded in winter season, followed by rainy season and the least in summer season.

Above analysis of data can be utilised by other research scholars, Government policy
makers, dairy planners and administrators to take suitable policy decisions for the
betterment of dairy cooperative societies across the country.

2.33 Dairy Systems in India.

A Banerjee (2006) India is a country where more than 70 percent of its

population is living in the villages. Maximum population comprise of small, marginal,
landless farmers. This group of population own about 70 percent of milching animals of
the country. These milching animals depend mainly on the agricultural by products.
Indias 78 percent of agricultural land still depends upon the rains, which is not cetain
most of the time. Thus, the farmers are always afraid of flood, droughts or other natural
disasters. This has made the agricultural income uncertain for the farmers. Due to this
reason, dairying has emerged as the reliable source of income for the farmers.
Generally, by keeping one to two milching animals, these farmers are able to manage
their finances.

In 1950, India used to import 55,000 tones of milk powder annually. Today the import of
milk powder has stopped and actually India is exporting milk powder to other countries.
Indian dairy industry has been hit by low cost imports from time to time. Thus the major
challenge for Indian farmers is to increase the milk production and earn adequate profit.
To achieve this aim, the government policies must be made more farmer and dairy

History of dairy industry can be broadly divided into two parts. These are pre operation
flood period and post operation flood period. History of dairy can be traced back to the
period of British rule, when military farms were established by the British government to
supply uninterrupted milk for their troops. However, the capacity of these military farms
were not enough to look after the needs of other population of the area.

The Indian Dairy Industry development started with the establishment of Kaira District
Cooperative milk producers union in 1946. Now it is known as AMUL. It used to
compete with a private company named Poison for supply of milk to Bombay city. Due
to movement, Bombay Government terminated their contract with Poison and signed
their contract with AMUL in 1952 for supply of milk to Bombay. In 1955, dairy and milk
powder factory was established with an aid from United Nations Childrens Fund
(UNICEF). AMUL produced milk powder and baby food from buffalo milk in 1960.
Today AMUL is able to meet the needs of milk and various other milk products need of
the country.

In 1964, while inaugurating a AMULs cattle feed plant, Sri Lal Bahadur Shastri, the then
Prime Minister of India desired to create a national level organisation on the lines of
Anand Model dairy cooperative. That is how National Dairy Development Board
(NDDB) was founded in 1965 with its Headquarters at Anand. Thereafter, NBBD has
been controlling all the activities of dairy cooperatives.
The situation which was prevailing in India before Operation Flood, similar situation is
still prevailing in a number of African and Asian countries. Thus, Indias experience may
offer help in these countries. NBBD was tasked to explore the Anand Model dairy
cooperatives in the Asian and African countries. World bank has also recognized the
potential of Anand Model, and hence is financing similar type of projects in Bangladesh,
Sri Lanka and Malaysia.

2.34 Dairy Cooperative and Milk marketing in India: Constraints and


K Rajendran and Samarendu Mohanty (2004) This research paper discusses

the present status of milk marketing, various constraints and its future in India. In the
first part of the research paper the authors have discussed the background knowledge
of milk production in India. In the second part of the research paper the authors discuss
various constraints and future opportunities in this field in India.

India is the country of largest population of cattle and buffalo in the world. Approx 70
percent of the cattle and dairy animals belong to the small and marginal farmers.
Approx 30 percent of the milk produced by the dairy farmers are retained by them for
household consumption. 85 percent of the total milk produced in India is marketed
through unorganized sector and only 15 percent is routed through organised sector.
Though organised sector is attracting large number of dairy farmers, however, still the
unorganized sector is attracting the lion share of milk produced in India due to three
reasons. The first reason is that private players pay the cost of milk per litre without
measuring their Fat and SNF content, whereas all cooperative pay the dairy farmers
based on the Fat and SNF content of the milk. The second reason is that the most of
milk produced by dairy farmers are from crossbred cows which produces more milk with
a lower fat content. The third reason is the payment policy. Private players pay the
dairy farmers on day today basis, whereas cooperatives pay them on weekly or
fortnightly basis.

Operation flood linked the Indian cities to the milk producers. It provided veterinary
health care for the milching animals, various types of feed, facility for artificial
insemination. Anand model cooperatives have eliminated the middlemen and brought
the milk producers in direct contact with consumers through cooperatives.

However, various constraints do exist in the milk marketing. These constraints are in
the form of low productivity of milching animals, existence on small scale, the dairy
farmers are still unorganized, scattered over remote areas, lack of animal health and
feed, lack of regular round the year assured income, lack of basic infrastructure, lack of
transport facility for milk, storage, processing and marketing facility, paucity of

Inspite of various constraints, there are four future challenges for the dairy industry in
India. The first challenge is the quality of milk, second is the product development, third
is the infrastructure development and the fourth challenge is global marketing.

These factors will help the Indian Dairy Industry in integrating production, processing,
value addition and marketing the milk and milk products in domestic as well as global
markets in future.

2.35 Rising consumption of Meat and Milk in Developing Countries Has created
a New Food Revolution.

Chritopher L Delgado (2003). The amount of meat and milk consumption in the
developing countries has gone up three times more than the increase of consumption in
the developed countries. It is estimated that by 2020, the developing countries will
consume 177 mmt more milk and 107 million metric tons (mmt) of more meat than they
consumed in 1998. The increase in the number of livestock is likely to increase the
demand of feed by 300 mmt by 2020. The income of people in the developing countries
is increasing, leading to more consumption of milk, milk products, meat and meat
products. This in turn is likely to bring the Livestock revolution.

Basically livestock revolution is driven by demand. The positive impact of livestock

revolution is that it is likely to improve the income of marginal and small farmers in the
rural areas of developing countries. Increasing demand of livestock is an opportunity for
the small and marginal farmers to benefit from it and exploit this opportunity to the

2.36 Business Strategies for Managing Complex Supply chains in Large

Emerging Economics: The story of AMUL.

Pankaj Chandra, Devnath Tirupati (2003). This research paper has been written
with an aim to draw various types of lessons from the experiences of AMUL. This is
likely to be useful for all the cooperatives and firms who are likely to work in an
emerging but fragmented markets like china and India.

The economies of India and china are underdeveloped. It has marginal and small
farmers as suppliers. It has various fragmented supply bases. Some of the lessons
which can be drawn from AMULs success are; cooperatives and firms in such
environments need to balance their demand and supply, formulation of network of
producers leading to economy in production, formulation of operational efficiency by
way of cost cutting and low cost strategy. The last lesson is to focus on the long term
approach, social development and education, accepting information technology in data
collection, analysis and decision making and innovations.

2.37 A study on role of MILKFED in Punjab.

Harpreet Kaur (2016). This research paper has gone into the details of sales of
Punjab State Cooperative milk producers federation limited (MILKFED). The secondary
data for the period from 2009-10 to 2014-15 has been collected by the author. The
secondary data so collected has been analyzed with the help of sales trend analysis,
mean and compound growth. The study reveals that MILKFED has better net profits for
the year 2011-2012 than the other years of 2012-13, 2013-14 and 2014-2015.

MILKFED was established in the year 1973. Its main aim is to provide assured market
for milk and milk products and secondly provide technical help to the marginal and small
farmers for increasing their milk production. It deals in milk, milk powder, skimmed milk,
butter, khoea, cheese, ghee, malted food, ice cream and lassi. MILKFED has the
expected target of increasing its turnover to Rs 2900 crores by the end of 2016-17.
Sales trend of MILKFED increased to Rs 2371.27 crores in 2014-15 whereas the figures
in 2009-10 was Rs 1253.95 crores. Thus the annual growth rate comes to 13.30%.
The sales of paneer was of 1730.21 MT in 2009-10 which went upto 2129 MT in 2014-
15. Thus the annual growth rate of paneer comes to 4.63 percent. MILKFED has
generated profits during 2009-10 to 2014-15.

2.38 Cash Management of milk Cooperatives: A Comparative Study of MILKFED

and HDDCF.

Manvir Kaur (2012). The main objective of this research paper is to review the
Dairy cooperatives of Punjab and Haryana and study their cash management.

The MILKFED or Punjab State cooperative Milk Producers Federation Limited was
established in 1973. The main objectives of MILKFED included providing milk market to
milk producers, provide technical helps to increase the milk production. It markets its
products in the brand name of VERKA. It has ten dairy plants with a capacity of
processing 7,82,000 litres of milk per day. Its products include milk, ghee, lassi, milk
cake, table butter, paneer, flavoured milk and dahi.

Haryana Dairy development Cooperative Federation Ltd also known as HDDCF was
established on 01 April 1977. The main objective of HDDFF is to promote the economic
interest of dairy farmers of the state, specially those belonging to economically weaker
sections. It helps in improving breed of the cattle, their productivity & production in the
rural and urban areas of the state. It markets its products in the brand name of VITA.

MILKFED net cash flow coverage ratio was 48.51, whereas HDDCF had the cash flow
coverage ratio of 13.42 during the period from 2005-06 to 2009-10. These figures
reveal that MILKFED is working more efficiently than HDDCF as far as cash obligations
with current income is concerned.

Liquidity analysis is based on current ratio, ratio of cash, liquid ratio and bank balances
to total assets of the organisation. Average percentage of cash and bank balances to
current assets of HDDCF is 76.72 and that of MILKFED is 84.91. This reveals that
MILKFED has more liquid assets than HDDCF to meet its emergency needs.
Thus the overall analysis shows that financially MILKFED is stronger than HDDCF for
the study period from 2005-06 to 2009-10.

2.39 Operational performance of milk cooperatives- a comparative study of


Manvir Kaur (2011). Punjab State Cooperative milk producers federation limited,
popularly also known as MILKFED was established in the year 1973. Haryana dairy
development cooperative federation limited, popularly also known as HDDCF was
established in the year 1997. The aim of this research paper is to study the operational
performance and various marketing analysis of MILKFED and HDDCF. The operational
performance has been tested based on various factors like the number of functional
societies, Unions count, members strength, number of plants, chilling infrastructures,
procurement of milk. The research has covered the period from 2005-06 to 2009-10.
MILKFED is marketing its products under the brand name of VERKA, whereas HDDCF
is selling its product in the market in the name of VITA.

In dairy cooperative, functional society collect the milk from dairy farmers and sends the
same to the dairy plant twice a day. Having compared the functional society, it revealed
that the mean value of functional societies in case of MILKFED is 6230 whereas in case
of HDDCF it is only 5299. MILKFEDs mean value of members was 3,63,600 whereas
in case of HDDCF the mean value of the number of members was 1,34,002 only.
MILKFED had 11 unions as compared to HDDCF who had only 6 unions. MILKFED
had more number of milk unions, milk plants and chilling centres compared to HDDCF.
Average daily procurement of milk in respect of MILKFED was higher than HDDCF.
Peak procurement of milk in case of MILKFED was higher than HDDCF. Mean value of
sales figure of MILKFED was 10005 lac whereas it was Rs 99 lacs in case of HDDCF.

Certain suggestions have been offered by the author. Firstly, both the dairy
cooperatives should open milk booth in rural areas for the sale of milk and milk
products. Secondly, both MILKFED and HDDCF should procure more milk during the
flush/ peak season. Thirdly, MILKFED should take necessary steps to increase the
average daily procurement of milk. Fourthly, the HDDCFs society number reduced in
the year 2009-10. Therefore, the dairy cooperative should increase the number of
societies for procurement of more milk from rural areas. Fifthly, HDDCF should
establish more unions, plants and village societies to increase their business. Lastly,
HDDCF should make their products available in smaller quantities so as to reach more
number of customers.

2.40 Financial performance of Kanyakumari District Cooperative Milk Producers

Union (KDCMPU).

Dr V Darling Selvi (2016) Aim of this research paper is to find out the financial
standing of Kanyakumari district cooperative milk producers union. To find out the
financial standing, the author has used various factors like, current ratio, debt equity
ratio, creditors turnover ratio, gross profit ratio, proprietary ratio, return on investment,
net profit ratio, quick ratio, return on investment, stock turnover ratio and return on

Kanyakumari district cooperative milk producers union was registered on 25 January

1949. It started functioning on 07 Feb 1950, as Nanjil Nadu milk supply society. In Jan
1951, the cooperative was named as Nanjil Nadu Milk Supply Cooperative Union.
Later, in 1961, it was again renamed as Kanyakumari district cooperative milk supply
union. On 16 Feb 1982 it was renamed as Kanyakumari District Cooperative milk
producers union. It is located in Nagercoil.

Kanyakumari is the district of Tamil Nadu where least milk is produced. Therefore, the
producers have to take this as a challenge to formulate new strategies for marketing
their products.

Financial standing has been ascertained by ratio analysis. It has revealed that average
current ratio has crossed 2.64, debt equity ratio is 2%, liquid ratio is 2.41, 38% for
proprietary ratio, debtors turnover ratio has reduced to 44%, gross profit ratio has an
average growth rate of 907% over the period under study. Thus the financial standing
of Kanyakumari district cooperative milk producers union is good from all angles.
2.41 The economics of milk production in Orissa, India, with particular
emphasis on small scale producers.

Amit Saha, Otto Garcia, Torsten Hemme (2014). Orissa is one of the poorest State
of India where there is poverty and per capita income of people is less. More than 80
percent of the rural population of the state depends upon crop cum livestock farming.
Milk is the most important product of cows and buffaloes.

Aim of the research paper is to gain an insight into the household of small and marginal
farmers in Orissa and obtain the estimates of cost per unit of milk produced and to find
out their potential to improve due to global competition.

International farm comparison network (IFCN) developed the methodology for the
economic analysis. In this type of analysis farm types are determined taking into
consideration farm location, herd size of the farm and production system.

India produces largest amount of milk in the world, accounting for about 15 percent of
the total world milk production. However the milk yield in India was only 694 Kg per cow
per year in the year 2002, which is very low when compared to the milk yield of USA,
Germany or New Zealand. Milk yield of USA is 11 times higher than that of India. The
prices received by the producers in USA is twice than that of Indian farmers. In
Germany it is 50 percent higher than that of Indian farmers. It is only in New Zealand,
where the price of milk has been found to be slightly lower than that of Indian farmers.

This study has carried out the analysis of six dairy farming systems in the State of
Orissa. All the six systems have been found to cover their cash costs and they
positively contribute to their farm income.

2.42 Exploring the cost of milk production & potential economics of scale in a
dairy cooperative.

Parth Shah (2012) In this research paper the author has examined the
effectiveness of Amul by way of comparing the cost of producing milk and procurement
prices offered by the dairy cooperative. Author has determined whether there are
economics of scale in milk production.
The above objectives of the research paper is very important for the policy makers of
cooperative and it is equally important for the rest of the dairy sector. In this research
varying cost factors like fodder, cattle feed, shelter, labour cost have been taken into
consideration. In addition to this varying amounts of milk produced during winter &
summer seasons have been taken into consideration. The research was conducted in
close coordination between milk producers and research scholars of Indian Institute of
Rural Management.

Buffaloes and cows give out milk twice a day in the morning and evening for about 6-7
months and 8-9 months respectively. This period is called the lactation period for cows
and buffaloes. The milk producers make profit from the milching animas during this
period only.

Steps taken by the government may suggest that it is interesting in the workings of the
dairy market, but it is not like that. Today market is driven by the economics of demand
and supply. Governments policy will allow the general population to continue
consuming milk and milk products in future.

2.43 A performance appraisal of Dairy Industry in Gujarat.

Mr Arvind M Patel (2006). The present research paper deals with the efficiency
of dairy cooperative industry of Gujarat engaged in collection, processing and marketing
of milk and milk products. The research has taken the data from nine leading dairy
cooperative units of Gujarat. The data has been collected for ten years from 1993-94 to
2002-03. The study has been done in six chapters. The first chapter deals with history
and dairy development in Gujarat. Second chapter deals with research methodology
and conceptual framework. The third chapter talks of common size income statement.
The fourth chapter deals with analysis of value added statement. The fifth chapter talks
of analysis of profitability.

Amul dairy recorded the highest average gross profit margin ratio of 25.08 percent of
sales. The average gross profit margin ratio was 21.07 percent of sales when all the
nine leading dairy cooperative units were considered. This was mainly due to less
procurement cost.
Vasudhara and Gopal dairy had negative return on gross capital employed. Whereas
all other dairies had their return on gross capital employed positive during the study

Management of resources is indicated by turnover ratio of an organisation. In this

research, total assets turnover recorded a fluctuating trend in all most all the dairies
except Gopal and Amul dairy.

The research suggested that all the dairies need to reduce the procurement cost, which
could be done by reducing transportation expenditure.

2.44 Regional trends and pattern in milk production and drivers for future
growth in Gujarat state.

Jignesh Shah, Darshana Dave (2010) Milk production is influenced by various

factors like population of milch animals, characteristics and yields of these milch
animals. In India, the milk production has been affected by various factors in different
regions of the country. In few states, it is the number of milch animals which has made
the difference. Whereas, in some of the states it is the improvement in the technology
which have improved the production of milk. In few states, it is the mix of number of
milch animals and technological improvements which has affected the milk production.

Aim of this research paper is to analyse the various factors of milk production in Gujarat
state. The data for this research has been collected from few issues of Integrated
Sample Survey, which is published by Directorate of animal husbandry. The period of
1990-91 to 2008-09 has been covered in the study. Composition of milching animals,
their growth and productivity has been covered. Various factors associated with milk
production has also been covered.

Gujarat has been broadly divided into five regions for the study. These regions are
North Gujarat, South Gujarat, Central Gujarat and Kachchh and Saurashtra region.

It has been analysed that there is a positive improvement in all the categories of
milching animals, but the rate of improvement is better in cross-bred cows and buffaloes
than the local cows. There has been a shift in rearing buffaloes than the local cows. A
similar type of trend has been revealed at all India level. In the year 1990-91 to 2000-01
there was a growth in population of cross bred cows to the tune of 6 percent, which
went upto 18 percent for the duration of 2000-01 to 2008-09. Milk production for the
period from 1990-91 to 2008-09 in respect of local cows doubled from 9.55 lakh tonnes
to the tune of 18.51 lakh tonnes. Whereas, in case of cross bred cows the figures rose
from 1.77 lakh tonnes to 11.92 lakh tonnes, which is an increase of seven times. In
case of buffaloes, it rose to 51.10 lakh tonnes from 22.26 lakh tonnes. The cross bred
cows milk share increased whereas the milk share of local cows and buffaloes have

It has been revealed from the study that the rate of milk production growth of Gujarat is
higher than that of India. It has resulted in increasing the milk production share of
Gujarat from 6.5 percent to 7.7 percent in last 18 years. The main driver of growth in
milk yield is the increasing number of milching animals followed by yield of these
milching animals. It has been suggested by the author that in future more attention
should be paid in increasing the yield of milching animals than increasing the number.

2.45 Viability of commercial dairy farming in Haryana.

Nirish Chandra Sahu, Jancy Gupta, A K Singh, B K Chaudhari (2012).

Aim of the research paper is to study the profile of commercial dairy farms of Haryana,
estimate the cost and return on their milk production and technical feasibility of these
commercial dairy farms.

Selection of zone, districts and respondents was done with a multistage sampling
technique. The districts of Haryana which were selected for study included Karnal,
Yamuna Nagar, Kurushetra and Kaithal. These districts have presence of large number
of dairy farms. The category of dairy farms was based on number of animals. Small
dairy farms owned 30 to 44 milching animals, medium farms owned 45 to 69 milching
animals and large farms owned more than 69 milching animals. A total of 23 small, 14
medium sized and 8 large sized commercial dairy farms, thus making it a total of 45
commercial dairy farms were considered for the study.
Cost factors were clubbed under two heads, namely fixed costs and variable cost.
Fixed costs included expenditure on cattle shed, stores, machinery, equipments,
interest and depreciation. The interest on capital was calculated at 8 percent. Variable
cost included expenditure on feed, labour, veterinary and other expenditures. Technical
feasibility included pre-production, production and post production.

The study revealed that most of the dairy farmers were of the age group of 36 to 50
years. Large commercial farmers strength consisted of 75 percent strength who were
graduate and above. Maximum of these dairy farmers belonged to joint family. Max
number of dairy farms had cross bred cows. Average number of milch animals
maintained with small dairy farms was 35.87, with medium dairy farms it was 56.15 and
with large commercial dairy farms the strength was 96, local cows were available with
few commercial dairy farms only.

Average investment per milching animal came to Rs 47,975 which was about 72
percent of the total investment. The investment on milching animals was increasing
whereas the expenditure on cattle shed, stores and equipment was decreasing from
small to medium and to large dairy farms.

Net cost of milk production of cross breds animals were highest in case of small
commercial dairy farms whereas it was lowest in case of large commercial dairy farms.
Large dairy farms were found to be economical for labour cost. Miscellaneous
expenditure mainly on Artificial Insemination was highest in case of large dairy farms. It
came to the light that better health care and management practices were being adopted
in large commercial dairy farms. Buffalo maintenance cost was highest in case of large
dairy farms and lowest in case of small dairy farms.

The study revealed that 25 percent of the total large dairy farms were technically
feasible. A trend of progressive increase in technical feasibility was observed from
small to medium and to large commercial dairy farms.

In the end of the study, the author has suggested to have more cross bred animals due
to its profitability. Large commercial dairy farms were most viable due to better milk
production, income and technical feasibility.
2.46 Economic Analysis of Cost and returns of milk production in Bikaner
district of Rajasthan.

Raju Kumawat, N K Singh, Chiranjee Lal Meena (2014). Dairy Industry is an

important part of Indian economy, since maximum people associated with this industry
belongs to the rural India. It provides direct and indirect employment to large number of
rural population. Cattle serves as an insurance for the rural poor, because it can be
sold in case of any emergency. The need for milk and milk products is increasing due
to increase in population, urbanization, rise in the income level of population, awarness
level, importance of milk nutrients for human beings etc. Performance of dairy Industry
is impressive in terms of milk production and population of cattle, but it is extremely poor
in productivity.

This research has been undertaken to study the profitability of milk production, feeding,
milk supply pattern and adherence to various scientific practices for the dairy farms of
Bikaner District of Rajasthan. For the research, five dairy farms having a strength of
more than 20 milch animals were considered. Mainly primary data was collected from
the dairy farmers in the form of interview in the year 2010-11. Thereafter, the data was

The analysis revealed that feed was the major cost component of variable cost, followed
by the labour cost. Dry fodder was the main component of their feed, followed by
concentrates and green fodder. Out of the total milk produced 7.47 percent was
consumed as milk in the family, 5.94 percent was converted into milk products and
86.59 percent was sold to dairy plants, hotels and other agencies.

In the end of the study, the author has suggested to adopt the scientific management
practices in all dairy farms for better milk yield. Holstein Friesion and Jersey cows
should be procured more in number due to better yield from them. Recommended feed
and fodder should be given to milch animals. Better breeding practices if made
available to the milk producers, will go a long way in improving the milk production of
dairy farms.
2.47 Economic analysis of Investment Pattern cost of milk production and
profitability of commercial dairy farms in Maharashtra.

Avinash K Ghule, N K Verma, A K Chauhan, Pravin Sawale (2012). Dairy farming

on the large scale is done in the eastern and western Maharashtra. Out of these areas,
the district of Ahmed Nagar was selected for this research mainly because it is the
highest milk producing district of Maharashtra. This district lies in the centre of the state
from where access to important markets of Mumbai, Pune, Nasik, Thane and
Aurangabad is easy. In Ahmed Nagar district, two tehsils namely Sangamner and
Rahuri were selected. Out of each tehsil, a cluster of six villages having maximum
number of commercial dairy farms were selected. Forty commercial viable dairy farms
were selected. Thereafter, primary data was collected from them by way of personal
interviews. Thereafter, these data were tabulated and analysed.

Fixed investment of commercial dairy farms comprised of investment on cattle, cattle

shed, stores, various machinery and equipment. Fixed cost includes interest on capital,
depreciation of animals, buildings/ sheds, machinery and equipments. Variable cost
included feed expenditure, labour, veterinary and other miscellaneous expenditure.

Average capital investment of one commercial dairy farm was calculated to be Rs 12.17
lakhs. Out of the total investment, investment on cattle amounted to 56.40 percent.
Investment on cattle shed and store turned out to be 36.92 percent and machinery and
equipment investment was of the tune of 6.68 percent. The research revealed that net
cost of milk production of cross bred cattle was highest in medium commercial dairy
farms and was lowest in large commercial dairy farms. As far as profitability of dairy
farms is concerned, all the dairy farms were found to be commercial viable. Their
average yearly income was Rs 1,91,458.

The study reveals that large commercial dairy farms have invested maximum part of
their fixed investment on the cattle. Whereas, small commercial dairy farms have
invested maximum part of their investment on their infrastructure.

2.48 A study of Promotion and Distribution strategy of dairy industry in

Kolhapur district.
Ingavale Deepa (2010). Aim of this research paper is to study the promotional
strategy and distribution strategy of dairy industry in Kolhapur district of Maharashtra.

There is 13 dairy farms in Kolhapur district. For this study two cooperative, one private,
one public limited and one primary dairy cooperative were selected. Only those dairy
farms where pasteurization capacity was more than 2000 litres per day were included
for the research work. Only those dairy farms were included in the study which were
producing milk and milk products. The research has covered the period from 1991-92
to 2006-07. Five point likert scale has been used for the research work.

Having compiled all the data, the same was compiled and tabulated. Thereafter the
analysis of the data was done. Maximum number of dairy farms are of the opinion that
they advertise their milk and milk products brand at national level. Majority of the dairy
farms have agreed that continuous advertisement of their dairy farms is done and their
dairy farm has developed a brand name in general peoples mind. Maximum dairy
farms have agreed to the fact that they employ sales promotion schemes for various
distributors and retailers. They do not offer sales promotion schemes for customers.
Their relation with the public has been good. They do not have retail outlets at all the
places in Maharashtra. They give training to sales people.

The dairy farms of Kolhapur district advertise their products at local and regional level
only. They are doing marketing of their products through distributors and retailors.
However, the study reveals that Kolhapur district dairy farms need to put more
emphasis on marketing of milk and milk products.

2.49 Perception towards likestock breeding service delivery by dairy


Prakash Kumar Rathod, T R Nikam, Sariput Landge, Amit Hatey,

B P Singh (2014). Aim of this research paper is to find out the impact of
livestock breeding services being delivered by cooperatives for the dairy farmers in
western Maharashtra, India.
There are six regions in Maharashtra. One of these six, western region also called as
Pune region was selected for this study, due to holding of largest livestock population in
this region. This region also produces and processes maximum milk and milk products
when compared to other regions of Maharashtra. Zila Dudh Utpadak Sangh limited,
Kolhapur is the largest and most advanced dairy cooperative in western region. This
dairy cooperative is also known by its brand name of GOKUL. 15 farmers were
earmarked each from 10 villages, thus making a sample of 150 farmers. A total of 16
breeding services were considered, which included Artificial Insemination (AI), diagnosis
of pregnancy, infertility camps etc.

The study revealed that 71 percent of farmers were of middle age, 16 percent were
young and 13 percent were old. 37.33 percent were of higher school category, 29.33
percent studied upto college level and 20.67 percent were illiterate. In 2010, two lakh
cases of Artificial Insemination were reported from 387 AI mobile centres. Artificial
Insemination (AI) workers are available in the villages who are well trained by the union.
76.66 percent of the farmers revealed that the animal breeding services were made
available in time whereas 23.34 percent revealed that services were delivered late.
31.33 percent reported that the breeding services were free whereas 44.67 percent of
farmers reported that they were nominally charged. 24 percent felt that the services
were highly charged. Finally, it was concluded that Gokul cooperative provided the
breeding services in time and mostly free. However, a need has been felt by the
farmers to improve the quality of breeding services.

2.50 Perceived constraints in livestock service delivery by dairy cooperatives:

Western Maharashtra, India.

Prakash Kumar Rathod, T R Nikam, Sariput Landge, Amit Hatey (2012).

Aim of this research paper is to find out various constraints with dairy cooperatives in
livestock service delivery for the farmers of the rural part of our country, particularly in
western Maharashtra.

There are six regions of Maharashtra. Out of six regions, western Maharashtra or Pune
region was considered for the research work mainly due to maximum number cattle
population and also maximum quantity of milk production from this region of
Maharashtra. In this particular region, Kolhapur Zila Dudh utapadak sangh limited,
Kolhapur, which is functioning in the brand name of Gokul was selected for the study
mainly due to its large milk handling capacity of milk which is of the tune of 11.25 lakh
litres per day. It covers 3788 village level dairy cooperatives and 238 routes for milk
collection every day.

The primary data was collected from 150 farmers and 35 dairy staff which included
secretary of village cooperative & veterinarians. Constraints were researched under
four categories, namely; human resource, financial, policy related and administrative

46 livestock services being delivered by Gokul Dairy was studied under seven heads.
Firstly, Delivery of animal health care service was done through 37 routes with 60
qualified veterinary personnel. The service was available round the clock. Secondly,
Breeding service included performing Artificial Insemination (AI), animal breeding,
infertility camps, pregnancy diagnosis. Thirdly, production and management services
included balance feeding and housing management of livestock. Fourthly, feed and
fodder production included providing of improved varieties of fodder seeds named
Gajraj and Lucerne and provision of balanced concentrate with its brand name
Mahalaxmi. Fifthly, extension services included training, advisory, educational tour,
exhibitions and farm visit for farmers. Sixthly, marketing services included collection of
milk and making its payment on weekly basis. Lastly, other services included provision
of Insurance schemes like KISAN.

The first constraint studied was human resource constraints. 56.66 percent farmers
revealed the paucity of veterinarians as the most important constraint. Second
constraint studied was financial constraints. 92.66 percent revealed that high cost of
concentrates was the most major constraint. Third constraint studied was policy related
constraints. It included mainly higher incidence of disease occurrence and low fat level
of local breed cattle. The last constraint studied was administrative constraint. It
revealed that complex and difficult procedure for getting insurance and subsidy was the
main administrative problem.
The author is of the opinion that dairy cooperative should concentrate to improve upon
the quality of various services being provided by them. They need to evolve a method
to reduce the costs of various services to make it more farmer friendly for them to utilise
these services.

2.51 SWOT analysis of dairy cooperatives; Western Maharashtra.

Dr Prakesh Kumar Rathoe, Dr TR Nikam, Dr Saripat Landge, Dr Amit Hatey (2011).

Aim of this research paper is to find out the role of dairy cooperatives in increasing
dairy output and making of dairy farmers products by various live stock
services with particular reference to Gokul Dairy Cooperative of western Maharashtra.
The other objectives of this study include, studying
socio- economic and personal profile of commercial dairy farmers, studying the various
livestock services and strengths, weakness, opertunities and threats (SWOT analysis)
of Gokul dairy.

Maharashtra state consists of six regions. The Western region of the state is also called
Pune region. This region has been specially selected because it has largest number of
live stock and also produces largest quantity of milk in Maharashtra. Within western
region Kolhapur Zila Dudh Utapadak Sangh limited also known as Gokul was slected.
Primary data was collected, tabulated and then analysed for inferences and

70.66 percent of the dairy farmers were of middle age, 16 percent belongs to young age
and 13.34 percent belongs to old age. 37.33 percent of the dairy farmers had higher
schooling, 29.33 percent had college level education, 20.67 percent were illiterate and
12.67 percent of the dairy farmers had primary education.

Strength of Gokul dairy included efficiency, less wastage of milk, high quality of milk
products. This dairy had developed computer based accounting systems. Their board
members have diversified experience and knowledge.
Weakness include paucity of professionals, poor internal communication, lack of clear
benefit package, unwillingness of certain members in participating training activities,
unable to meet the demand of concentrate feeds.

Opportunities include open market for growth globally, continuous reliable and quality
supply at affordable price, good field level and village level technical support.

Threats include cleanliness, waste disposal, plastics used for packing are difficult to
dispose off.

Author finally suggested that Gokul dairy should improve the various services and also
should bring down the cost of these services to attract dairy farmers.

2.52 SWOT analysis of dairly industry in India.

I Hima Bindu, Dr S E Subrahymanyam, Dr MS Bhat (2014) National Dairy

Development Board (NDDB) was established in the year 1965. The objectives of NDDB
included, sponsoring, promoting, acquiring, managing, controlling or constructing any
work which promotes dairy. Other objectives included increasing productions of milk,
marketing of milk and milk products and proving any other assistances.

Swot analysis of Indian dairy industry was carried out. Strength of Indian dairy industry
are in subsequent paras. Availability of milk of technically professionally trained
manpower, availability of milk in abundance, easy availability of infrastructures, vast
livestock population, scope for improvement in milk production, demand of milk is likely
to go up progressively, are some of the strength.

Weakness of Indian Dairy Industry are listed below. Inadequate transportation means,
tough completion among dairy units, erratic power supply in the rural areas, seasonal
variations in milk production, Approximately 85 percent of the Indian milk produced are
marketed through unorganised sector, milk production is scattered over large number of
farmers, low milk prices are some of the weakness of Indian Dairy Industry.

Various opportunities of Indian Dairy Industry are listed below. Huge scope for
investment in the production of milk product sector, Huge potential of export of milk and
milk products due to low cost, serious effort required to be made to eliminate
middlemen, Huge opportunity to increase the income of farmers by exploiting the high
demand are some of the opportunities of Indian Dairy Industry.

Various threats to Indian Dairy Industry are in subsequent para. Low productivity of
cattle, production area are in remote villages which increases the transportation cost.
Large portion of Indian population do not care about quality of milk, demand of dairy
products is dependent on income of consumers. These are some of the threats to
Indian Dairy Industry.

2.53 Cooperatives Dairy development in Karnataka, India Assessment.

Harold Alderman (1987). Karnataka cooperative dairy development was

established in 1974 with the aid received from the World Bank. This cooperative
developed as part of operation flood dairy development project which was launched in
India. Karnataka Dairy Development covers three ecological zones of Karnataka. This
research was confirmed to only two of the three ecological zones of Karnataka. In each
zone, 21 villages which were with the cooperative and 10 villages which were not with
the cooperative were selected. The villagers which were not with the cooperated acted
as the control group. The primary data was collected, collated tabulated and thereafter
the same was analysed.

The analysed data reveled that those villagers which were with the cooperative
produced double the quantity of milk then which was produced by the control group.
The reason for this was mainly due to large number of cross bared cows and buffaloes
being held in the house holds of those who were with the cooperative. However, there
was only a slight difference in the feeding rates. Labours employed in cooperative type
of household per unit of cattle was found to be less. However, the net difference in both
the cases were very marginal. It was also revealed that dairying did not influence much
in the cropping pattern of the house holds. The intention of the dairy development
project was to enhance the producer price being paid to the house hold dairy farmers
without increasing the consumer price on which the milk and milk products are sold to
the consumers. The house hold milk producers of cooperatives get better prices than
the house hold which were in control groups. They got 3 percent higher price for buffalo
milk and little less higher for the cow milk. Cooperatives increased the income of
households. Increase in income was more in case of larger land holder than those of
smaller land owner. Study reveled that cooperatives are changing the pattern of cattle
owned by household from local bred to crossbred cows and buffaloes.

2.54 Problems & prospects of cooperative milk produces of Dharampuri District.

G Krishna Moorty, Dr R Arunmozhi (2013). Aim of this research paper is to

study the Dharmpuri dairy cooperative with an aim of identifying their day today
problems and how these problems impact their day to day life. Various types of
cooperative society in Tamil Nadu include, the village milk producers Cooperative
Society, district milk producer cooperatives union and state milk marketing federation.
The various objectives of the study include, firstly the impact of various dairy
cooperative policies on the dairy farmers who produce milk, secondly, to find out the
demographic pattern of milk producers, thirdly, to find out the problem of milk producers
of Dharmapuri district.

Primary data was collected through questionnaire. For this research work 120 milk
producers were approached and a total 691 milk producers responded. The data was
compiled tabulated and analysed.

Number of male population involved in dairy industry in Dharmapuri district was 74

percent, whereas the number of female population turned out to the 25.7 percent. The
milk producers generally belongs to the age group of 31 to 40 and 41 to 50 years. Most
of the milk producers were married and their main source of livelihood was dairy

Literacy level of milk producers was very low. Generally, they were not aware of the
government policies and subsidies being offered to them. Milk and milk products
require infrastructure for processing, chilling and marketing. Dharampuri district lacked
in processing units. Cattle feed and hospitals need to be created. Middle men involved
in the dairy industry need to be removed. There is a requirement to identify new
products and new marketing strategies need to be evolved to face the global completion
in dairy sector.